A dramatic drop in earnings from private banking sent the share price of UBS AG plunging Tuesday as investors suddenly lost confidence in the Swiss banking company's vaunted global wealth management business.

UBS reported that net third-quarter income rebounded sharply, to $770 million, from a loss of $588 million last year. But investors focused on a 42% decline in pretax earnings from private banking, to $410 million, and a 2.6% drop in assets under management, to $414 billion. The stock plunged 4.6%, to $287, in trading on the Zurich exchange.

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