US stocks ended Friday lower after oil prices and a spat involving Deutsche Bank (NYSE:DB) saw investors flee energy and banking stocks – but resilient on the week.
The S&P 500 bellwether closed down 0.4% at 2,139. Although it had been a rollercoaster ride of a week, with Fed speakers giving and removing hope of rates staying on hold next week, and data and oil prices that added to the gyrations, the top index ended just 21 points lower than where it closed last Friday – in the wake of Fed Hawk Eric Rosengren’s comments.
Range Resources Corp (NYSE:RRC) was the top faller, of 5.1% to $37.38 after the company announced the completion of its merger with and acquisition of the stock of Memorial Resource Development Corp. (NASDAQ:MRD), followed by Oracle Corp (NASDAQ:ORCL), down 4.8% at $38.92.
Nevertheless, Oracle was reiterated a buy by brokers at Wedbush. Read more.
Meanwhile, PC chip maker Intel (NASDAQ:INTC) was the S&P 500’s second-highest riser of 3% to $37.67, after the company said it expects a bullish third quarter, with higher revenue on rising PC demand.
Despite warnings of a profit-taking spree following gains on Thursday, Western Digital Corp continued to rally on Friday, up 3.1% to $54.94 and the top S&P 500 riser.
The S&P Midcap 400 was down 0.5% at 1520 led by oil casualty Gulfport Energy Corp (NYSE:GPOR) down 5.7% to $26.74. The West Texas Intermediate oil benchmark was down 1.6% at $43.19.
The S&P Smallcap 600 lost 0.2% to 740 and was led by Badger Meter (NYSE:BMI), down 50% to $32.89.
Novavax Inc (NASDAQ:NVAX) shares were dumped to the tune of 84.5% to $1.29 after the vaccine developer said its experimental respiratory vaccine failed an important study. Analysts at Piper Jaffray also cut their price target on the stock to $1 from $14 and downgraded the stock to "neutral" from "overweight."
Novavax led the losers in the wider small-cap Russell 200 index, which itself lost 0.2% to 1224.
Banking stocks took a hit after Germany’s New York-listed Deutsche Bank (NYSE:DB) was reported to have been stung with a US settlement claim of $14bn for selling toxic mortgage-backed securities in the so-called “subprime mortgage” scandal of the mid 2000s which led to the financial crisis.
Lenders took a hit after the US Department of Justice proposed that Deutsche Bank pay $14bn to settle allegations of mis-selling mortgage securities. However, Deutsche Bank said it had no intention to settle the claims anywhere near that figure.
Deutsche Bank stocks closed down 9.4% at $13.38 on Wall Street.
Midsession
US shares extended losses at midsession on Friday as energy stocks increasingly joined in the downside chorus along with banks.
The S&P 500 market bellwether was down 0.7% to 2,132 and and the top-10 losers included Range Resources Corp (NYSE:RRC) down 4.6% to $37.57 after the company announced the completion of its merger with and acquisition of the stock of Memorial Resource Development Corp. (NASDAQ:MRD).
Southwestern Energy Company (NYSE:SWN) fell 3.5% to $13.59 while Cabot Oil & Gas Corp (NYSE:COG) was down 3.4% to $24.20.
The S&P Midcap 400 was down 0.6% at 1519 and led by Gulfport Energy Corp (NYSE:GPOR) down 5.6% to 26.76.
The S&P Smallcap 600 lost 0.3% to 739 its top decliner was industrials group Badger Meter (NYSE:BMI) down 50% to $32.95. The second-biggest decliner was Basic Energy Services (NYSE:BAS) down 8.8% to $0.52, while other top decliners included Gulfmark Offshore (NYSE:GLF) down 6.1% to $1.84, and Suncoke Energy Inc (NYSE:SXC) down 5.4% to $6.47.
Oil prices extended their decline to down 2.3% to $42.91.
Banks were led lower after Germany’s New York-listed Deutsche Bank (NYSE:DB) was reported to be hit with a US settlement claim of $14bn for selling toxic mortgage-backed securities in the so-called “subprime mortgage” scandal of the mid 2000s which led to the financial crisis.
Lenders took a hit after the US Department of Justice proposed that Deutsche Bank pay $14bn to settle allegations of mis-selling mortgage securities. However, Deutsche Bank said it had no intention to settle the claims anywhere near that figure.
Deutsche Bank stocks were 9.5% lower at $13.37 on Wall Street.
Open
US stocks opened lower on Friday, weighed down by energy and financial stocks in the wake of Deutsche Bank’s (NYSE:DB) settlement claim for misspelling in the credit crunch while oil prices again eased.
In a secondary wave of disappointments, the latest US consumer prices data put the risk of a Fed rate hike next week back on the table. Consumer prices rose by 0.2% month-on-month in August, higher than the 0.1% economists expected.
The S&P 500 market bellwether was down 0.6% at 2134 and led by Range Resources Corp (NYSE:RRC) down 4.9% to $37.44 after the company announced the completion of its merger with and acquisition of the stock of Memorial Resource Development Corp. (NASDAQ:MRD) in an all-stock transaction valued at approximately $4.2 billion, including the assumption of MRD's net debt.
But the big story was Germany's largest lender Deutsche Bank which faces a $14bn settlement claim from the US in respect of accusations it packaged toxic mortgages between 2005 and 2007. The subprime mortgage credit crisis that consumed Wall Street and interbank markets, and led to the Eurozone sovereign debt crisis, had its origins in 2007.
Deutsche Bank US shares were down 9.6% at $13.35 on Friday.
The S&P Midcap 400 index was down 0.5% at 1521 and led by Gulfport Energy Corp (NASDAQ:GPOR) down 3.5% to $27.36 after oil prices slid again.
The US oil benchmark WTI was down 1% at $43.48.
The S&P Smallcap 600 shed 0.5% to 737.
Pre-Open
Following European counterparts, Wall Street shares are set for a lower open as the week ends.
In London, the blue chip benchmark FTSE 100 is down 0.32% to 6,709, while the German DAX is 1.25% lower at 10,297.
German shares are being weighed on by news from the bigegst lender Deutsche that it faces a US$14 billion settlement claim from the US to settle claims it packaged up toxic mortgages between 2005 and 2007.
Deutsche Bank shares are down over 8%.
On Thursday, Wall Street shares extended gains after tech giant Apple (NASDAQ:AAPL) shares advanced for a fourth day, as stocks of its new larger 5.5-inch iPhone 7 Plus have reportedly already sold out.
The new phone goes on worldwide release today and inkeeping with tradition , Apple Stores in most major cities have been swamped by queues, some of which started days ago.
Then Dow Jones finished Thursday up 177 at 18,212, while the Nasdaq gained 75 at 5,249, while the S&P500 added 21 to 2,147.
In futures today, the Dow Jones was down 63 points, the Nasdaq is down 13.5 points while the S&P500 futures shed 8.40.
US crude is also lower, down 1.66% to stand at US$43.18 per barrel.