Stocks fall before earnings as euro weakens, commodities decline

Bank Earnings

The companies analysts are most bullish about are the ones whose stock prices are farthest below their highs -- banks. While financial institutions in the S&P 500 climbed 24 percent in 2012 for the biggest rally in nine years, they remain 58 percent below the record of February 2007, according to data compiled by Bloomberg. Signs of a housing recovery prompted Wall Street firms to raise estimates for profit growth to 21 percent for the third quarter and 32 percent in the fourth, the most of 10 industries in the S&P 500.

Economists project U.S. gross domestic product will increase 2.05 percent next year after rising 2.2 percent in 2012, according to the median of estimates compiled by Bloomberg.

Market Leaders

Home Depot Inc., Hewlett-Packard Co. and Walt Disney Co. lost more than 1.2 percent to lead the Dow down 26.5 points to 13,583.65. Facebook Inc., operator of the world’s largest social network, dropped 2.4 percent after being downgraded at BTIG LLC. Netflix Inc., the world’s largest video-subscription service, advanced 10 percent after the shares were raised at Morgan Stanley.

The Stoxx 600 fell 1 percent as all 19 industry groups retreated. Cookson Group Plc, a British supplier of materials to the steel and glass industry, plunged 12 percent after predicting its annual performance will be “materially” below its target.

Eurobank Ergasias SA surged 5.1 percent in Athens as National Bank of Greece SA offered to acquire its domestic rival as the nation’s debt crisis forces a wave of mergers. National Bank rallied 5.7 percent.

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