Financials drag stocks lower on Deutsche Bank fine risk

Fri Sep 16, 2016 4:55pm EDT
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By Saqib Iqbal Ahmed

NEW YORK (Reuters) - The possibility of a $14 billion fine for Deutsche Bank and a slide in oil prices hit financials and energy stocks on Friday, leading major global stock indexes lower.

U.S. data showing a strong increase in consumer prices last month bolstered expectations that the Federal Reserve will raise interest rates later this year, helping send U.S. Treasury yields and the dollar higher.

Stocks fell as investors dumped shares of banks in North America and Europe after the U.S. Department of Justice proposed Deutsche Bank (DBKGn.DE: Quote) pay $14 billion to settle an investigation into its selling of mortgage-backed securities.

Deutsche Bank, whose shares dropped roughly 8.5 percent, said it would fight the demand.

MSCI's world stocks index .MIWD00000PUS was down 0.49 percent and notched its second straight weekly loss.

Energy shares fell as crude oil prices slid by up to 2 percent to multi-week lows after swelling Iranian exports reinforced fears of a global glut.

Brent crude LCOc1 settled down 82 cents, or 1.76 percent, at $45.77 a barrel, while U.S. crude CLc1 settled down 88 cents, or 2 percent, at $43.03.

While traders have all but ruled out the possibility of the Fed raising interest rates at its meeting on Tuesday and Wednesday, residual doubts and questions about when the U.S. central bank may finally pull the trigger hurt sentiment on Wall Street.   Continued...

A specialist trader works at his post on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 15, 2016.  REUTERS/Brendan McDermid