FINANCIAL MARKETS
NEW YORK—U.S. stocks climbed Friday as banks made a rapid recovery following a steep fall a day ago. Investors hoped Deutsche Bank and the financial system in general were in better shape than they had feared.
Banks made the biggest gains Friday as Germany’s largest bank tried to reassure investors about its financial health. Investors hope Deutsche Bank will be able to negotiate down the massive cost of settling a U.S. investigation into mortgage securities. Energy companies rose as the price of oil continued to move higher.
Deutsche Bank is the largest lender in Germany, and investors are concerned about not only its plunging stock price, but the potential effect on the financial system if Deutsche Bank gets into serious trouble and the German government does not help it. Those fears faded on Friday.
The Dow Jones industrial average jumped 164.70 points, or 0.9 percent, to 18,308.15. The Standard & Poor’s 500 index rebounded 17.14 points, or 0.8 percent, to 2,168.27. The Nasdaq composite rose 42.85 points, or 0.8 percent, to 5,312.
The Department of Justice wants Deutsche Bank to pay $14 billion to end an investigation into mortgage-backed securities, and the stock jumped Friday after a report that the bank could settle the case with a smaller payment. Deutsche Bank’s U.S.-listed stock rose $1.61, or 14 percent, to $13.09. The stock has been pummeled this year and is trading near all-time lows. Financial stocks tumbled Thursday afternoon following reports that some hedge funds were moving their business out of Deutsche Bank. On Friday, bank stocks and the broader market regained almost all of those losses. Benchmark U.S. crude oil rose 41 cents to $48.24 a barrel in New York, and it rose 8 percent over the last three days. Brent crude, the international standard, slipped 18 cents to $49.06 a barrel in London. Oil prices surged this week after the nations of OPEC, which collectively produce more than one-third of the world’s oil, surprised investors with an agreement on a small cut in production. Investors hope energy companies will book larger profits as a result. Chevron jumped $1.65, or 1.6 percent, to $102.92 and EOG Resources rose $1.66, or 1.7 percent, to $96.71.
In other energy trading, wholesale gasoline picked up 2 cents to $1.49 a gallon. Heating oil rose 2 cents to $1.53 a gallon. Natural gas slipped 5 cents to $2.91 per 1,000 cubic feet.
Gold fell $8.90 to $1,317.10 an ounce. Silver rose 3 cents to $19.21 an ounce. Copper gained 2 cents to $2.21 a pound.