Stocks Drop on Wall Street

Stock markets in the United States and Europe sank lower Tuesday on another jolt from the European Union —

this time the abrupt cancellation of a meeting of finance ministers that was meant to precede a leaders’ summit

meeting on Wednesday.

The sovereign debt problems in European nations that share the euro have been looming over the markets for more than a year, with investors able to price in some of the twists and turns in the efforts by European leaders to resolve them. But on Tuesday, stocks that had opened lower dipped a bit further on concern about what the cancellation of the pre-summit ministers’ meeting might portend.

Europe’s leaders said they had made some progress over the weekend on measures aimed at addressing their financial and economic problems, but a big issue that analysts had expected to be tackled on Wednesday was how to expand the stability fund of 440 billion euros ($611 billion) so that it could cover Spain and Italy, if necessary.

“A bit of a surprise,” said Kate Warne, investment strategist for Edward Jones, of Tuesday’s development. “Investors have been overly optimistic on the progress made by European leaders and yes, I think there is good news from Europe, but there seems to be the presumption that because they are meeting everything would work out smoothly.”

“It is never quite as much or as fast as anyone would like,” Ms. Warne said.

In addition, she noted, companies that provide a glimpse into the economic outlook with their quarterly earnings reports continued to affect trading in the United States. After Caterpillar helped lift trading on Monday with strong results, on Tuesday 3M, another bellwether company, missed earnings forecasts and lowered its guidance, noting the slowdown in Europe, Ms. Warne noted.

“We all know that Europe is on the verge of a mild recession but hearing that from a company that typically manages through these situations quite well means it may be more significant,” she said. “It suggests it may also be a problem for other companies.”

3M stock was down more than 5 percent in the first hour of trading on Wall Street. The Dow and the Nasdaq were each down just over 1 percent, while the Standard & Poor’s 500-stock index, which measures the broader market, fell more than 1.2 percent.

The new lows on Tuesday, if they stick, could derail some of the gains made in recent days that had set the Dow Jones industrial average and the Nasdaq composite index higher year-to-date. The S.& P. remained more than 1.3 percent lower in the year so far.

The financial sector was down more than 2 percent.

In other economic news on Tuesday, home prices showed a modest rise in 10 of 20 cities surveyed in the Standard & Poor’s/Case-Shiller index. But the housing sector is far from recovered, and the jobs market is one of the factors along with stock market volatility that has hit consumer confidence, as reflected in a decline in the Conference Board’s index to 39.8 points in October after 46.4 in September.

“Clearly, recent financial market turmoil has weighed heavily on consumer confidence,” said Joshua Shapiro, the chief United States economist for MFR, Inc. Other issues, he added in a research note, included an ailing jobs market.

The United States 10-year Treasury bond fell to 2.18 percent in yield, from 2.23 percent.