(Corrects to “15.5 percent” from “1.9 percent” in paragraph 12)
* Pfizer falls after abandoning plan to split
* U.S. presidential debate kicks off at 9:00 p.m. ET
* Deutsche Bank down, weighs on U.S. financials
* Indexes down: Dow 0.70 pct, S&P 0.62 pct, Nasdaq 0.72 pct
By Yashaswini Swamynathan
Sept 26 (Reuters) - Losses on Wall Street deepened in volatile trading on Monday, as Pfizer led a decline in healthcare stocks and Deutsche Bank pulled financials down, with investors awaiting the first U.S. presidential debate between Hillary Clinton and Donald Trump.
Pfizer fell 1.5 percent after it decided against splitting into two. The stock was the biggest drag on the S&P 500 healthcare index, whose 1.1 percent decline was the steepest among the nine declining S&P sectors.
Deutsche Bank’s U.S-listed shares fell as much as 7.1 percent to a record low of $11.84 and triggered declines among big Wall Street banks after a German magazine said Chancellor Angela Merkel has ruled out state assistance for the lender.
The bank said it did not need the German government’s help with a $14 billion U.S. demand to settle claims it missold mortgage-backed securities.
The S&P financial index fell 1 percent, led by JPMorgan’s and Wells Fargo’s 1.4 percent drop. The KBW Bank index fell 1.64 percent, its steepest drop since July 5 in the wake of the Brexit vote.
At 12:25 p.m. ET (1625 GMT), the Dow Jones Industrial Average was down 127.72 points, or 0.70 percent, at 18,133.73.
The S&P 500 was down 13.35 points, or 0.62 percent, at 2,151.34.
The Nasdaq Composite was down 38.04 points, or 0.72 percent, at 5,267.71.
The White House race has so far had little discernible effect on the market, but that may soon change as polls show a tightening race ahead of the first presidential debate.
With just over six weeks until Election Day, some investors see a toss-up contest creating volatility in certain sectors, including health insurers, drugmakers and industrials.
“Investors are acting extremely nervous with regards to the debate ... and it highlights the fact that the markets are not focusing on the health of the economy, interest rates and geopolitical events,” said Robert Pavlik, chief market strategist at Boston Private Wealth.
The CBOE Market Volatility index, also known as Wall Street’s “fear gauge”, was up 15.5 percent, clocking its biggest percentage gain in nearly two weeks.
The lone gainer among the 11 major S&P sectors was the energy index, which rose 0.28.
Oil prices rallied 3 percent in a market that saw volatility touch a 6-month high, as the world’s largest producers gathered in Algeria to potentially work out a plan to limit output.
Declining issues outnumbered advancing ones on the NYSE by 1,868 to 1,043. On the Nasdaq, 1,918 issues fell and 799 advanced.
The S&P 500 index showed two new 52-week highs and one new lows, while the Nasdaq recorded 46 new highs and 23 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D‘Souza)