MARKET SNAPSHOT: U.S. Stock Futures Attempt A Rebound
September 30 2016 - 9:29AM
Dow Jones News
By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
U.S.-listed Deutsche Bank shares jump 4%
Wall Street stocks were poised to open slightly higher Friday as
investors appeared to shrug off worries about the financial health
of Deutsche Bank AG that helped sink U.S. equities a day earlier
and unsettled overseas markets.
The Dow Jones Industrial Average futures rose 11 points at
18,105, while S&P 500 index futures added 2 points to 2,151.
Nasdaq-100 index futures futures climbed 2 points to 4,846.50.
"It is surprising to hear the [German Chancellor] Merkel saying
they will not help Deutsche Bank, but it's also possible she is
saying this to get the U.S. government to rethink the size of the
fine. Everybody knows the cost of allowing a major bank collapse,"
said Steve Chiavarone, associate portfolio manager at Federated
Global Allocation Fund.
The Dow industrials closed nearly 200 points lower on Thursday
(http://www.marketwatch.com/story/wall-street-stocks-could-struggle-as-euphoria-over-opec-deal-fades-2016-09-29)
after a report that some of the lender's biggest clients were
pulling cash and securities or dialing back trading activity
through the bank
(http://www.marketwatch.com/story/fearful-clients-pull-billions-of-dollars-out-of-deutsche-bank-2016-09-30).
Wall Street's CBOE Volatility index , or "fear gauge," jumped the
most in three weeks
(http://www.marketwatch.com/story/wall-streets-fear-gauge-jumps-the-most-in-3-weeks-on-deutsche-bank-worry-2016-09-29)
at one point in that session.
Read:Deutsche Bank crisis threatens to roil global markets
(http://www.marketwatch.com/story/a-crisis-in-european-banks-threatens-to-roil-global-markets-2016-09-28)
The S&P 500 index dropped nearly 1% on Thursday, with all
sectors finishing in the red. Friday marks the end of the week,
month and quarter, and the S&P 500 is down 0.6%, down 1%, and
up 2.5%, respectively, with one session left to go.
Shares of Deutsche Bank (DBK.XE) briefly fell to their lowest
level on record in Frankfurt on Friday, triggering sharp losses
across European stock indexes. The German bank's U.S.-listed shares
(DBK.XE) were up 4% in premarket trading, after closing 6.7% lower
on Thursday.
The shares trimmed losses as reports emerged of a letter sent to
Deutsche Bank employees
(http://www.marketwatch.com/story/deutsche-bank-ceo-blames-market-forces-for-crisis-in-letter-to-employees-2016-09-30)
by the lender's chief executive, John Cryan. The banking boss said
recent media speculation that a group of hedge funds were reducing
their exposure to the financial major was "causing unjustified
concerns" and that the bank has "strong fundamentals".
European banks cast a shadow: Friday marked the first
opportunity for European markets to react to the Deutsche Bank
news. At one point, the German lender's shares dropped below 10
euros and traded at a record low.
The Stoxx Europe 600 index
(http://www.marketwatch.com/story/deutsche-bank-shares-hit-a-record-low-weighing-heavily-on-european-markets-2016-09-30)
fell 0.7%, as banks across the region took a battering. Spain's
IBEX 35 index was down nearly 2%.
"While we do not rule out the possibility of a renewed tension
in the financial markets, the amplitude of such scenario is hard to
price in," said Ipek Ozkardeskaya, senior market analyst at
LGC.com, in a note to clients.
"We are already in a low-rate, postcrisis environment as the
result of the 2007-2008 subprime crisis. The financial markets are
certainly not well armored to face another financial crisis,"
Ozkardeskaya said.
Economic docket: Consumers spending was barely changed in August
(http://www.marketwatch.com/story/consumer-spending-softens-in-august-2016-09-30),
while personal income inched and savings rate inched higher.
Inflation also inched up, but remains below the 2% target set by
the Federal Reserve.
The Chicago purchasing managers index for September is due at
9:45 a.m. Eastern, while consumer sentiment for the same month is
scheduled for 10 a.m. Eastern.
Stocks to watch:Costco Wholesale Corp
(http://www.marketwatch.com/story/costco-ernings-get-boost-from-switch-to-visa-2016-09-30).(COST)
reported a surprise jump in earnings, helped by lower credit card
fees after its new deal to accept Visa (V) cards.
Shares of Cognizant Technology Solutions Corp
(http://www.marketwatch.com/story/cognizant-technologys-stock-tumbles-after-disclosure-of-internal-foreign-payments-probe-2016-09-30).(CTSH)
tumbled 8.4% in premarket trade Friday, after the consulting
company disclosed an internal investigation it whether certain
payments it made to facilities in India violated the U.S. Foreign
Corrupt Practices Act.
Other markets: Oil prices continued to fall Friday, with U.S.
crude down 20 cents, or 0.4%, to $47.63 a barrel. Deutsche Bank's
woes weighed on the euro , which slumped to a new one-week low
(http://www.marketwatch.com/story/euro-slumps-to-one-week-low-as-deutsche-bank-fears-mount-2016-09-30)
against the dollar on Friday.
Asian markets
(http://www.marketwatch.com/story/asian-shares-rattled-by-concerns-over-oil-deutsche-bank-2016-09-30)
finished largely lower, with the Nikkei 225 index dropping
1.4%.
(END) Dow Jones Newswires
September 30, 2016 09:14 ET (13:14 GMT)
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