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U.S. stocks slide as banks tumble on Deutsche Bank worries |

U.S. stocks slide as banks tumble on Deutsche Bank worries

The Associated Press
| Monday, September 26, 2016 6:18 p.m
Traders Kevin Lodewick (left) and Richard Cohen work on the floor of the New York Stock Exchange on Monday, Sept. 26, 2016.

NEW YORK — Stocks slumped Monday, and banks took the biggest losses.

Deutsche Bank plunged as investors worried about the financial health of Germany’s largest bank.

Pfizer pulled drugmakers down after it announced it won’t break up into two companies.

Stocks fell for the second day in a row.

Banks were hurt by a drop in bond yields, which means lower interest rates and smaller profits on loans.

Consumer companies fell as home improvement retailers were affected by a slowdown in sales of new homes.

European banks tumbled after the German magazine Focus said Deutsche Bank won’t get a government bailout if it asks for one. Its report, published Friday, cited “government circles” as its source.

“There’s some stress in the banking industry there, and questions about whether governments have the will to step in,” said Steve Chiavarone, associated portfolio manager for Federated Investors.

The Dow Jones industrial average lost 166.62 points, or 0.9 percent, to 18,094.83. The Standard & Poor’s 500 index fell 18.59 points, or 0.9 percent, to 2,146.10. The Nasdaq composite dropped 48.26 points, or 0.8 percent, to 5,257.49. Stocks are coming off two weeks of solid gains, and the Nasdaq set all-time highs twice last week.

Focus’ article also said the German government won’t help the Deutsche Bank by intervening with U.S. officials who want it to pay $14 billion to end an investigation into its sale of mortgage-backed securities. The bank’s U.S.-listed shares tumbled 90 cents, or 7.1 percent, to $11.85. The stock is down 51 percent this year.

Other banks also tumbled. Goldman Sachs took the largest loss among Dow stocks and sank $3.65, or 2.2 percent, to $161.48. Citigroup shed $1.26, or 2.7 percent, to $45.89.

Bond prices rose. The yield on the 10-year U.S. Treasury note fell to 1.58 percent from 1.62 percent. That also affects banks, as lower bond yields mean lower interest rates and smaller profits on lending.

Stocks overseas also weakened. The DAX in Germany dropped 2.2 percent, and France’s CAC 40 fell 1.8 percent. In Britain, the FTSE 100 was down 1.3 percent. Japan’s benchmark Nikkei 225 edged down 1.3 percent. South Korea’s Kospi slipped 0.3 percent, and Hong Kong’s Hang Seng lost 1.7 percent.

Oil prices bounced higher as investors monitor a meeting of oil producers in Algeria. Benchmark U.S. crude rose $1.45, or 3.3 percent, to $45.93 a barrel in New York. Brent crude, the international benchmark, rose $1.46, or 3.2 percent, to $47.35 a barrel in London. Oil exploration companies rose the most. Transocean climbed 42 cents, or 4.6 percent, to $9.52 and Noble Energy added 60 cents, or 1.8 percent, to $33.62.

The dollar slid to 100.34 yen from 101.09 yen. The euro rose to $1.1255 from $1.1231.

Categories: Wire stories
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