U.S. stocks finished an up-and-down week on a positive note, helped by a strong showing from energy stocks and an easing of concerns about the viability of Deutsche Bank, Germany’s largest bank.
The bank’s Frankfurt-listed stock closed Friday at 11.57 euros, up 6.4% on the day. It was also a sign the market is less worried, at least for now, about the bank’s stability than it was earlier in the week, after reports put Deutsche Bank in settlement talks involving billions of dollars concerning a mortgage-security probe by the U.S. Justice Department. Financial companies in the Standard & Poor’s 500 index responded positively, gaining 1.43% on Friday.
The S&P 500 finished the week, having gained 0.80% during Friday’s session to close at 2,168.27. That is about 22 points off its all-time high of 2,190 set on Aug. 15.
Still, “we are on pins and needles,” says Chris Hyzy, chief investment officer at Bank of America’s global wealth and investment-management division. With the third quarter in the books, “we know that October holds more risks,” he adds. He cites the uncertainty of the upcoming presidential election, the possibility of a rate hike in the U.S. late in the year, and concerns about Deutsche Bank’s financial strength as key worries that investors are trying to assess. Yet Hyzy remains upbeat about U.S. stocks, convinced that the third-quarter earnings season will be solid.
Even though it was a so-so week for stocks, there were some nice gains, especially in energy. The Dow Jones Industrial Average gained 0.26%, lifted by an increase of nearly 1% on Friday. One of its constituents, ExxonMobil (XOM), was the second-best performer in the Dow, with a gain of nearly 5% last week. Chevron (CVX) rose about 4%.
The two stocks got a nice boost from rising oil prices. The price of West Texas Intermediate crude finished at more than $48 a barrel, up about 8% on the week. Undergirding the increases was last week’s surprising news that the Organization of Petroleum Exporting Countries had agreed to cut production, a move that should help support oil prices if the deal is actually carried out.
(Source: Barrons Online)