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NEW YORK (Reuters) - Stock prices across major markets rose on Friday, while the euro stabilized as Deutsche Bank's shares recovered from record lows on a report it is close to a deal to reduce a massive U.S. settlement over charges related to selling toxic mortgage bonds.
Wall Street ended a volatile week on a positive note, marking a solid third quarter. The S&P 500 booked a 3.3 percent gains, while the Dow Jones Industrial average rose 2.1 percent and the Nasdaq gained 9.7 percent.
Brent crude prices fell as traders booked profits on a rally underpinned by an OPEC agreement to reduce output for the first time in eight years to address global oversupply.
U.S., German government bond yields rose as investors trimmed holdings in reaction to the gains on Wall Street and in European equity markets.
"We are very much being driven by headline risks at Deutsche Bank," said Gennadiy Goldberg, interest rates strategist at TD Securities in New York.
Deutsche Bank AG's U.S.-listed shares were last up 14 percent at $13.09 (DB.N) but they have lost 11.3 percent for the month. Its Frankfurt-listed shares (DBKGn.DE) were up 6 percent, rebounding from a record low of 9.898 euros earlier Friday.
AFP reported on Friday Germany's largest lender is near an agreement with U.S. officials to pay $5.4 billion to settle charges. Germany's largest lender had said it would fight a $14 billion demand from the U.S. Department of Justice.
The heavier amount had raised investor fears about Deutsche Bank's stability and whether it would be able to raise the cash to pay the settlement.
The Dow Jones industrial average .DJI rose 164.7 points, or 0.91 percent, to 18,308.15, the S&P 500 .SPX gained 17.14 points, or 0.8 percent, to 2,168.27 and the Nasdaq Composite .IXIC increased 42.85 points, or 0.81 percent, to 5,312.00.
The S&P financial index .SPSY was up 1.4 percent, while the STOXX Europe Banks index .SX7P was up 0.6 percent.
Europe's broad FTSEurofirst 300 index .FTEU3 eked out a 0.05 percent gain, at 1,350.66 after falling as much as 1.7 percent.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 nations, rose 0.77 points or 0.18 percent, to 418.38.
In the currency market, the euro EUR= was last up 0.13 percent, at $1.1237, rebounding from a nine-day low of $1.1153 earlier Friday.
The dollar index .DXY was down 0.06 percent at 95.479.
Brent crude LCOc1 settled down 18 cents or 0.37 percent lower at $49.06 a barrel, but U.S. crude CLc1 settled 41 cents or 0.86 percent higher at $48.24.
With the turnaround in stock prices, traders reduced their safe-haven holdings of low-yielding U.S. and German government bonds.
The yield on benchmark 10-year Treasury notes was up 4 basis points at 1.596 percent, while the 10-year German Bund yield was little changed at -0.118 percent, according to Reuters data. US10YT=RR DE10YT=RR
Spot gold prices XAU= fell $3.29 or 0.25 percent, to $1,316.76 an ounce.
Additional reporting by Gertrude Chavez-Dreyfuss in New York; Yashaswini Swamynathan in Bengaluru; Marc Jones in London; Nichola Saminather in Singapore; Editing by Richard Balmforth and Nick Zieminski