US stocks rallied on Friday, lifted by a surge in Deutsche Bank shares and financial stocks after concerns eased about the health of the German bank.
The S&P financial sector gained 1.4 percent, its best day in about two months.
Deutsche Bank’s US-listed shares jumped 14 percent a day after sinking to a record low.
Agence France-Presse reported that Deutsche Bank was nearing a US$5.4 billion settlement with US officials over charges related to selling toxic mortgage bonds.
Germany’s largest bank has been engulfed by crisis after earlier this month receiving a demand for up to US$14 billion by the US Department of Justice.
US stocks had sold off sharply on Thursday, after Bloomberg reported that some hedge funds had withdrawn excess cash and positions held at the German lender.
“The rumors that are out there that Deutsche Bank is going to get a better deal ... I think is adding some positive effect into the market,” said Jonathan Corpina, senior managing partner for Meridian Equity Partners in New York.
“I think people were fearful and concerned about what the outcome of this is going to be,” he said.
The Dow Jones industrial average rose 164.7 points, or 0.91 percent, to 18,308.15; the S&P 500 gained 17.14 points, or 0.8 percent, to 2,168.27; and the NASDAQ Composite added 42.85 points, or 0.81 percent, to 5,312.
Bank stocks boosted the S&P. Bank of America and Citigroup each climbed more than 3 percent and JPMorgan rose 1.4 percent.
Goldman Sachs’ 1.5 percent increase gave the Dow its biggest boost.
Eight of the 11 major sectors ended higher. Energy shares climbed 1.3 percent, with oil prices recording big weekly gains.
With Friday’s increases, the three major stock indices recorded their third straight week of gains.
The Deutsche Bank situation created a fresh risk for investors, who will be watching third-quarter corporate earnings and the upcoming US presidential election on Nov. 8 for reasons to buy or sell stocks.
For the year, the benchmark S&P 500 is up about 6 percent, with US equities benefiting from low interest rates around the world.
In other company news, Cognizant shares plummeted 13.3 percent, making it the biggest loser among S&P 500 firms. The information-technology services provider said it was conducting an internal investigation on possible violations of US anti-corrupt practices laws related to payments in India.
About 7.5 billion shares changed hands on US exchanges, above the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Advancing issues outnumbered declining ones on the NYSE by a 2.4-to-1 ratio.
On the NASDAQ, a 2.69-to-1 ratio favored advancers.
NOTABLE SHIFT: By 2030, 50% of all laptops would be assembled in Southeast Asia, while Taiwan would still mostly focus on research and development, a report said Global laptop and desktop computer supply chains are expected to shift significantly away from China in the next 10 years, a Market Intelligence & Consulting Institute (MIC, 產業情報研究所) report said. By 2030, only 40 percent of global laptop production would remain in China, said the report, which was released on Thursday. “The reshuffling of the global supply chain will be one of the most important trends in the next 10 years,” the institute said in the report. “In the long run, key component makers will follow laptop assemblers in moving out of China.” The Taipei-based institute predicted most key component makers
Merck Group Taiwan yesterday said that it plans to invest substantially on expanding its fab in Kaohsiung’s Lujhu District (路竹) to better serve its local customers, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電). The company said it plans to expand its production space by 50 percent in the next five years and its workforce by about 40 percent, Merck Group Taiwan managing director Dick Hsieh (謝志宏) told a media briefing in Taipei. Hsieh declined to disclose investment details, but said that the latest investment would exceed the total amount Merck has invested in Taiwan over the past few years. Those investments would be
INVEST IN TAIWAN: A metal components casting firm and the world’s largest maker of aluminum bicycle rims also obtained approvals to join the program Solar Applied Materials Technology Co (SOLAR, 光洋應用材料), a part of Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) “green supply chain,” has pledged to invest NT$1 billion (US$34.1 million) to build a new plant at the Tainan Technology Industrial Park (台南科技工業區), the Ministry of Economic Affairs said yesterday. SOLAR has been collaborating with TSMC to extract precious metals from waste and reuse them as “sputtering target” material in high-end semiconductor manufacturing, a TSMC press release issued in May said. Established in 1978, SOLAR also offers key materials and integrated services to customers in the optoelectronics, information and communications technology, petrochemicals and consumer electronics industries,
‘SWARM TECH’: Joint venture FARobot is to develop autonomous mobile robots that would first be deployed in Hon Hai’s factories to optimize production efficiency Hon Hai Precision Industry Co (鴻海精密) and Adlink Technology Inc (凌華科技) have formed a robotic venture that aims to use “swarm technology” to create robots that can communicate with one another on the factory floor to optimize production efficiency. Hon Hai is Apple Inc’s leading iPhone assembler and the world’s largest contract electronics maker, while Adlink supplies industrial computers and Internet of Things solutions. Through a subsidiary, Hyield Venture Capital Co (鴻揚創投), Hon Hai holds a 51 percent stake in autonomous mobile robot (AMR) developer FARobot (法博智能移動), while Adlink owns the remaining 49 percent. Together, the two companies put up NT$200