Banks, energy firms lift stocks
U.S. stocks climbed Friday as banks made a rapid recovery from their steep fall a day earlier. Investors hoped that 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 kept moving higher, and strong earnings from Costco sent consumer stocks up.
San Jose cloud computing firm Nutanix skyrocketed in its first day of public trading, rising 131% to $37.
Deutsche Bank is the largest lender in Germany, and investors are concerned about not only its plunging stock price but also the potential effect on the financial system if the bank gets into serious trouble and the German government does not help it. Those fears faded Friday, and the bank’s U.S.listed stock rose 14% to $13.09.
“People came to the realization that this isn’t likely to be a big systemic risk that ripples through the financial sector,” said Nate Thooft, head of global asset allocation for Manulife Asset Management.
Benchmark U.S. crude oil rose 41 cents to $48.24 a barrel. It’s up 8% over the last three days. Brent crude, the international standard, slipped 18 cents to $49.06 a barrel. Oil prices surged this week after OPEC nations, which collectively produce more than one-third of the world’s oil, surprised investors with an agreement on a small cut in production.
Warehouse club operator Costco Wholesale jumped 3.4% to $152.51 after it reported a profit that was larger than analysts expected. Companies that make and sell household necessities also climbed.
Cognizant Technology Solutions tumbled 13.4% to $47.63 after the information technology consulting and outsourcing firm said it’s investigating possible bribes paid to officials in India.
Major stock indexes set records this quarter, thanks mostly to tech stocks. The Standard & Poor’s 500 tech index has climbed 12% over the last three months. Apple, the most valuable company in the S&P 500, surged 18%, partly on indications of strong sales for the newest iPhones. Microsoft, the next-largest company, rose 13% and Google parent Alphabet leaped 14%.
Bond prices sank Friday. The yield on the 10-year Treasury note rose to 1.60% from 1.56%. Stocks that pay high dividends, such as utilities and phone companies, traded lower.
Wholesale gasoline rose 2 cents to $1.49 a gallon. Heating oil rose 2 cents to $1.53 a gallon and natural gas fell 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 rose 2 cents to $2.21 a pound.
The dollar rose to 101.41 yen from 101.07 yen. The euro rose to $1.1237 from $1.1216.