Stock Market News For September 30, 2016
Zacks Investment Research | Sep 29, 2016 10:10PM ET
Benchmarks closed lower on Thursday, dragged down by declines in financial shares. Worries about the health of Deutsche Bank threatened to roil the financial sector, while talk of a December rate hike by the Fed officials unnerved investors. While the Dow closed down triple digits, all the sectors of the S&P 500 ended in the red. The Nasdaq, on the other hand, was weighed down by declines in shares of Apple and biotech stocks.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) declined 1.1% or 195.79 points to close at 18,143.45. The S&P 500 dropped 0.9% to close at 2,151.13. The tech-laden Nasdaq Composite Index closed at 5,269.15, decreasing 0.9%. The CBOE Volatility Index (VIX), a gauge of near-term investor anxiety, surged 13.2% to settle at 14.02. A total of around 7.7 billion shares were traded on Thursday, above the last 20-session average of 7 billion. Decliners outpaced advancing stocks on the NYSE. For 77% stocks that declined, 21% advanced. Deutsche Bank Hits All-time Low
Concerns over the stability of Germany’s biggest bank Deutsche Bank AG (DE:DBKGn) (Bloomberg report .
Some of the funds that have moved part of their listed derivatives holdings to other firms included Izzy Englander’s $34 billion Millennium Partners, Chris Rokos’s $4 billion Rokos Capital Management, and the $14 billion Capula Investment Management. A spokesperson from Deutsche Bank, however, claimed that the bank is pretty confident that a “vast majority” of its derivatives-clearing clients “have a full understanding of its stable financial position, the current macroeconomic environment, the litigation process in the U.S. and the progress the bank is making with its strategy.”
Nevertheless, the latest blow came in, when Deutsche Bank faces a $14 billion fine from the U.S. Justice Department. The bank needs to settle civil claims, which is related to sale of structured mortgage bonds during the 2008-2009 financial crisis. German Chancellor Angela Merkel had said that she wouldn’t offer state aid to the giant lender. Merkel was in no mood to offer assistance as she was heading into an election year.
Shares of the lender had already plunged more than 50% this year as investors remain worried about the institution’s thin capital cushion. The International Monetary Fund, back in June, had described Deutsche Bank as the greatest threat to the global financial system (read more: Deutsche Bank Down Over 7%, Stock Hits New Low ).
The Financial Services Select Sector SPDR (XLFS) decreased 1.4%. Dow components Goldman Sachs Group (NYSE:GS), Inc. (JPM ) dropped 2.8% and 1.6%, respectively.
Get The News You Want
Fed Officials on Rate Hike
Philadelphia Fed President Patrick Harker said that he favors hiking rates in December provided the economy continues to grow as expected. He believes that if the labor market keeps improving and inflation continues its steady rise then it would be appropriate to raise short-term interest rates “sooner rather than later”.
Atlanta Fed President Dennis Lockhart also expects the Fed to be in a position to raise rates soon. Possibility of a near term rate hike dented investors’ sentiment. The Fed, however, had opted to keep short-term interest rates unchanged “for the time being” as they sought further evidence of economic strength (read more: Fed Holds Off Rate Hike for Now: Top 5 Gainers ).
Apple, Biotechs Weigh on Nasdaq
Shares of Apple Inc (NASDAQ:AAPL). (BCS ) trimmed its price target. Apple was the biggest drag on the Nasdaq. Broad based selloff among biotech stocks also adversely affected the tech-laden index.
The iShares Nasdaq Biotechnology (IBB) declined 3.1%. Key biotech stocks such as Biogen (NASDAQ:BIIB) Inc. (
As Spotify Read More )
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buy"" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 ""Strong Sells"" and other private research. Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.