US stocks retreat with European shares amid anxiety over banks

NEW YORK (BLOOMBERG) - US stocks fell, tracking declines in European shares spurred by weakness in banks, while investors awaited a presidential debate tonight and a meeting between major oil producers this week.

Wells Fargo and Citigroup Inc. declined more than 0.6 per cent, while Deutsche Bank shares dropped to a record low amid concerns that mounting legal bills may force the lender to raise capital. Bats Global Markets slipped 1.2 per cent after agreeing to be bought by CBOE Holdings for about US$3.2 billion (S$4.3 billion) in cash and stock.

Bats jumped 20 per cent Friday on a Bloomberg report that the two companies were in talks.  The S&P 500 Index lost 0.6 per cent to 2,152.48 at 9:33 a.m. in New York (9:33 p.m Singapore time), after falling 0.6 per cent on Friday. The Stoxx Europe 600 Index sank 1.5 per cent, on track for the worst slide in almost three months.

"The negative implications of what's happening at Deutsche Bank are weighing on sentiment," said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles.

"The spillover from Friday's weak action, with nothing material coming from overseas other than the Deutsche Bank concerns, it's not surprising to see the market with a weaker tone. There isn't a lot happening this week, so the presidential debate is likely to have a big impact tomorrow and potentially going forward."

Oil rose after slumping Friday on concern OPEC won't reach an agreement to curb output. Its members and Russia meet on Wednesday in Algiers to discuss coordinated action to support prices. US elections are also in focus, with the first of three televised debates between presidential candidates Hillary Clinton and Donald Trump tonight.

The S&P 500 on Friday capped its biggest weekly advance in more than two months as investor concern eased about central banks' willingness to stimulate growth. The Federal Reserve last Wednesday held off raising rates, helping the equity benchmark recover from a rout earlier in September and return as of Friday's close to within 1.2 percent of a record set in mid- August.