Sharechat Logo

While you were sleeping: Financial stocks slide

Friday 30th September 2016

Text too small?

Wall Street dropped, with financial and health care stocks leading the way.

Financial shares including Goldman Sachs fell amid concern about the industry because of Deutsche Bank, which is fighting a US$14 billion claim from the US Justice Department to settle an investigation. 

A number of funds that clear derivatives trades with Deutsche Bank have withdrawn some excess cash and positions held at the lender, a sign of counterparties’ mounting concerns about doing business with Europe’s largest investment bank, Bloomberg reported.

“The chatter is adding a lot of short-term fear right now, especially in the financials sector,” Jonathan Corpina, senior managing partner at Meridian Equity Partners, told the Wall Street Journal.

Wall Street slid. In 2.22pm trading in New York, the Dow Jones Industrial Average shed 1 percent, while the Nasdaq Composite Index declined 0.8 percent. In 2.07pm trading, the Standard & Poor’s 500 Index dropped 1 percent. 

In the Dow, slides in shares of Goldman Sachs and those of Merck, last down 2.9 percent and 2.4 percent respectively led the decline. Bucking the trend were shares of Caterpillar and those of Verizon Communications, recently up 1.2 percent and 0.3 percent respectively.

Meanwhile investors are eyeing a speech from Federal Reserve Chair Janet Yellen later in the day for any fresh clues about the timing of a central bank interest rate increase.

A Commerce Department report showed US gross domestic product rose at a 1.4 percent annual pace in the second quarter, up from the 1.1 percent rate reported last month and exceeding analysts' estimates.

"It now appears that growth is slowly making its way back on to firmer ground," Michael Feroli, an economist at JPMorgan in New York, told Reuters.

Also moving to firmer ground were shares of ConAgra Foods, which jumped after the company posted better-than-expected quarterly earnings on improved margins. The stock last traded 7.6 percent as of 2.28pm in New York.

Earnings from continuing operations rose to 61 US cents last quarter, and up from 41 US cents in the year-earlier period, the company said. Analysts estimated 48 cents on average, according to Bloomberg and Reuters.

“Our efforts to infuse focus and discipline into our consumer businesses are clearly enabling us to expand our margins as we build a higher quality revenue base, improve efficiency, and deliver stronger, more consistent performance," Sean Connolly, chief executive officer of ConAgra Foods, said in a statement.

Oil advanced for a second day after the Organisation of Petroleum Exporting Countries unexpectedly agreed to pare output in a bid to encourage non OPEC producers to do the same and ease the global glut, and bolster prices.

The plan to cut output, which would be the first time it has done so in eight years, will be finalised at a November meeting.

In Europe, the Stoxx 600 Index finished the day with an increase of less than 0.1 percent. France’s CAC 40 Index gained 0.3 percent, while the UK’s FTSE 100 Index rose 1 percent. Germany’s DAX Index fell 0.3 percent, as Deutsche Bank shares closed 6.6 percent lower.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports