US STOCKS-Wall St falls on dollar climb, China move

* Dollar firms on short covering

* King Pharma soars on Pfizer takeover deal

* Fed minutes due at 2 p.m. EDT

* Indexes off: Dow 0.5 pct, S&P 0.4 pct, Nasdaq 0.2 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to open)

By Chuck Mikolajczak

NEW YORK, Oct 12 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) dropped on Tuesday
as China’s bid to cool down the world’s second biggest economy
sparked concerns it would crimp global growth and as the dollar
rebounded.

An official Chinese newspaper reported the government
raised bank reserve requirements by 50 basis points, the fourth
hike this year, due to excessive lending. The report confirmed
a Reuters story on Monday [ID:nTOE69A05I] and [ID:nTOE69A03Y]

“Right now, people are relying on China as the engine of
growth for the world economy, and the Chinese leadership is
concerned about their economy overheating, and they are taking
steps to try and cool it,” said Peter Jankovskis, co-chief
investment officer at OakBrook Investments LLC in Lisle,
Illinois.

“But you are seeing more and more of that. The U.S. equity
market is reacting to movements in foreign markets to a degree
that I’ve never seen before.”

The Dow Jones industrial average (.DJI: ) dropped 56.54
points, or 0.51 percent, to 10,953.80. The Standard & Poor’s
500 Index (.SPX: ) fell 4.57 points, or 0.39 percent, to
1,160.75. The Nasdaq Composite Index (.IXIC: ) lost 4.58 points,
or 0.19 percent, to 2,397.75.

The dollar rose against the euro and a basket of currencies
on a short-covering bounce ahead of the release of minutes from
the U.S. Federal Open Market Committee meeting on Sept. 21. The
dollar index (Read more about the global trade. ) (.DXY: ) was up 0.3 percent. [ID:nLDE69B1F0]

The prospect of the Federal Reserve buying more long-term
securities such as government bonds has created an inverse
correlation between the dollar and equities, with investors
using the greenback as a trigger to move into or out of stocks.
For details, see [ID:nLDE69B0OQ]

The Fed, which is set to release the minutes at 2 p.m. EDT
(1800 GMT), said after its September meeting it stood prepared
to provide more support for the economy but expressed concern
about low inflation.

Pfizer Inc (PFE.N: ), the world’s biggest drugmaker, agreed
to buy King Pharmaceuticals Inc (KG.N: ) for $3.6 billion. King
surged 39.4 percent to $14.15 while Pfizer shed 0.6 percent to
$17.30. [ID:nN12164348]

Avon Products Inc (AVP.N: ) jumped 2.2 percent to $33.90
after a British newspaper reported French cosmetics company
L’Oreal (OREP.PA: ) may want to buy Avon. [ID:nN12162453]

As earnings season picks up steam, results are expected
later from chipmaker Intel Corp (INTC.O: ) and railroad operator
CSX Corp (CSX.N: ).
(Editing by Jeffrey Benkoe)

US STOCKS-Wall St falls on dollar climb, China move