Oil gains, Deutsche Bank weighs on stocks; yen cuts losses
By Rodrigo Campos
NEW YORK (Reuters) - Crude oil futures rose on Thursday, adding to the previous session's rally on optimism over an OPEC plan to curb output, while stocks fell as Deutsche Bank tumbled after a report said trading clients have withdrawn excess cash and positions held in the largest German lender.
Energy stocks fared better than the rest of the market as oil prices rose. The Organization of the Petroleum Exporting Countries agreed to cut output to a range of 32.5 million - 33.0 million barrels a day from the group's current estimate of 33.24 million barrels.
But the mood elsewhere was sour as Deutsche Bank, despite saying it was confident clients know its financial position is stable, saw its U.S.-traded shares hit a record low of $11.185. The stock closed down 6.7 percent at $11.48 in record volume.
The slide, alongside a grilling of Wells Fargo's chief executive by U.S. lawmakers amid a call for the bank to be broken down due to a scandal over its opening of client accounts without agreement, weighed heavily on bank stocks.
The S&P 500 bank index .SPXBK fell 1.6 percent and was on track to lose more than 5 percent this month. Wells Fargo (WFC.N: Quote) fell 2.1 percent to $44.37.
"This Deutsche Bank story is really casting a very long shadow over equity markets," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.
The immediate cause of Deutsche's crisis is a fine of up to $14 billion from the U.S. Department of Justice for its sale of mortgage-backed securities.
"There is very little give in the system for a significant disruption and if investors move down that road where they once again become 'risk-off,' then the first line of fire is going to be these large money center banks," said Kenny. Continued...