Wall Street falls sharply on worries about banks
Reuters
Published Sep 29, 2016 04:35PM ET
Wall Street falls sharply on worries about banks
By Noel Randewich
(Reuters) - Wall Street dropped on Thursday, weighed down by Apple (NASDAQ:AAPL) as well as selling in Wells Fargo (NYSE:WFC), Citigroup (NYSE:C) and other major banks as investors worried about the health of Deutsche Bank (DE:DBKGn).
The S&P 500 financial index declined 1.49 percent after Bloomberg reported that some hedge funds have withdrawn excess cash and positions held at the German lender.
Growing concerns over the stability of Germany's biggest bank have pushed its shares to record lows and its U.S.-listed stock on Thursday tumbled 6.7 percent.
"This Deutsche Bank story is really casting a very long shadow over equity markets," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York. "In some respects, it speaks to fears over large money-center banks having serious problems, and the last time we had that conversation was the financial crisis."
Adding to negative sentiment in the banking sector, Wells Fargo & Co lost 2.07 percent after U.S. lawmakers rebuked CEO John Stumpf over his handling of sales abuses.
Citigroup dropped 2.28 percent and JPMorgan Chase (NYSE:JPM) fell 1.59 percent.
Apple fell 1.55 percent after Barclays (LON:BARC) cut its price target. The stock was the biggest drag on Wall Street.
The S&P healthcare index lost 1.84 percent and also weighed heavily on the S&P 500 as shares of Merck (NYSE:MRK) and Johnson & Johnson (NYSE:JNJ) declined.
Among the gainers, Qualcomm (NASDAQ:QCOM) jumped 6.3 percent after the Wall Street Journal reported the chipmaker is in talks to buy NXP Semiconductors. NXP surged 16.88 percent.
Up 5 percent this year, the S&P 500 is trading near 16 times expected earnings, above its 10-year average of 14, according to Thomson Reuters Datastream.
"Equity valuations are stretched and priced for perfection," said Mike Baele, managing director with the private client reserve group at U.S. Bank in Portland, Oregon. "I would not be surprised to see additional volatility."
The CBOE Volatility Index, a gauge of near-term investor anxiety, jumped 14 percent.
The Dow Jones industrial average slid 1.07 percent to 18,143.45 points at the close, its sharpest decline since Sept 13.
The S&P 500 lost 0.93 percent to end at 2,151.13 and the Nasdaq Composite dropped 0.93 percent to 5,269.15.
Get The News You Want
The S&P utilities index, which is sensitive to interest rates, fell 1.45 percent, its fifth day of losses in a row.
Oil prices were up a day after OPEC members agreed to curb production, even as analysts raised questions about the effectiveness of the deal.
Declining issues outnumbered advancing ones on the NYSE by a 3.87-to-1 ratio; on Nasdaq, a 3.09-to-1 ratio favored decliners.
The S&P 500 posted 22 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 82 new highs and 35 new lows.
About 7.7 billion shares changed hands on U.S. exchanges, above the 7.0 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Written By: Reuters
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.