US stocks opened higher for trading on Friday and accelerated gains after AFP reported that Deutsche Bank is near a $5.4 billion settlement with the US government over mortgage-backed securities.
Germany’s largest lender has been the worry of investors this week as it reportedly faced a $14 billion fine over an investigation into the sale of bad derivative products from the financial crisis.
At 11:17 a.m. ET, the Dow is up 187 points (1.03%), the S&P 500 is up 18 points (0.86%), and the Nasdaq is up 40 points (0.77%). The financials sector, which includes other big banks, is the biggest gainer on the benchmark S&P 500 index, up 1.62%.
Deutsche Bank’s US-listed shares gained as much as 12% after the report, which was tweeted by the AFP. They fell to an all-time low earlier this week as hedge funds reduced their exposure to the firm.
CEO John Cryan wrote a letter to employees earlier on Friday, reassuring them that the bank is financially stable.
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In US economic data released earlier, personal income rose in line with expectations, by 0.2%, while spending flatlined during August. Core personal consumption expenditures, the Federal Reserve’s preferred gauge of inflation that excludes volatile food and energy prices, rose for the first time in six months to 1.7%. It’s still shy of the Fed’s 2% target.
And, the University of Michigan’s consumer sentiment index for September inched up to 91.2 from 90 as confidence rose among higher income households.