Market Update & Important Indicators:
Financial shares rebounded from declines in the previous session, leading U.S. stocks higher Friday. Bank shares had fallen as worries about Germany's largest lender weighed on markets, reflecting investors' concerns about the challenges lenders face while economic growth remains weak and low interest rates squeeze profits. The swings came at the end of a quarter that was mostly calm in the U.S. The S&P 500 rebounded from the turbulence created by the Brexit vote to reach its first record in more than a year in early July. The index went two months without a move of 1% or more until early September, when investors sold stocks and bonds amid fears that central banks might pull back from their easy-money policies sooner than expected. The S&P 500 advanced 3.3% since June 30. The Dow Jones Industrial Average rose 0.9% to 18308 Friday. The S&P 500 gained 0.8% and the Nasdaq Composite climbed 0.8%.
European stock markets ended slightly higher Friday, erasing earlier sharp losses, as concerns over Deutsche Bank's financial health subsided on hopes the lender will pay a lower-than-feared fine to U.S. regulators. The Stoxx Europe 600 index rose 0.1% to close at 342.92, after trading with a loss of as much as 1.7% earlier in the session.
Asian shares fell Friday as traders pulled back their hopes for proposed oil production cuts, and as Deutsche Bank worries continued to rattle global markets. The Nikkei Stock Average ended down 1.5%, Korea's Kospi fell 1.2%, Hong Kong's Hang Seng index declined 1.9%, but the Shanghai Composite closed 0.2% higher. Oil prices moved lower in Asian trade Friday as doubts grew about a plan to limit production among members of the Organization of the Petroleum Exporting Countries. After initial enthusiasm about the deal, traders were noting Friday the plan's lack of specifics. Weakness in Asian shares, primarily in banking, was "very much related to what we could see in U.S. markets and issues with the banking sector in Europe," said Frank Benzimra, head of Asia equity strategy at Societe Generale. "The risk premium is rising on global concern over the financial system."
Australian shares fell Friday, as investors used a bout of fearful selling globally to take profits and square their books at the end of the month and quarter. Markets world-wide were rattled overnight by worries over the stability of Deutsche Bank and the broader banking sector. U.S. regulators had proposed that the investment bank pay $14 billion to settle a series of high-profile mortgage-securities probes, causing panicked hedge funds to pull assets. Financial stocks were sold off across the globe. In Australia, they led the share index S&P/ASX 200 lower, causing it to end down 0.7% at 5435.9 points.
On the London Metal Exchange, copper for delivery in three months was up 0.5% at $4,865/t. Among other metals, aluminium was up 0.3% at $1,665/t, zinc was up 1.0% at $2,377/t, lead was up 2.7% at $2,121/t, tin was up 0.1% at $20,164/t, and nickel was up 1.3% at $10,528/t.
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