Energy companies, banks lead a decline on Wall Street
NEW YORK - Energy companies are leading a broad decline on Wall Street on Friday as the price of crude oil turns lower. Banks also fell, led by a plunge in Deutsche Bank after the giant German bank said it wouldn’t settle with the Department of Justice over its handling of mortgage-backed securities in the run-up to the 2008 financial crisis.
The Dow Jones industrial average lost 106 points, or 0.6 percent, to 18,107 as of 1:50 p.m. ET. The Standard & Poor’s 500 index lost 12 points, or 0.6 percent, to 2,135 and the Nasdaq composite lost 18 points, or 0.3 percent, to 5,232.
The U.S.-listed shares of Deutsche Bank dropped $1.46, or 10 percent, to $13.30 after the bank said it did not intend to pay the $14 billion settlement that the U.S. government asked for. Federal regulators have been looking to settle with Deutsche Bank, as it has done with the other major Wall Street firms like Goldman Sachs and JPMorgan Chase & Co., for its role in the mortgage bubble and financial crisis.
Other European banks fell as well. Royal Bank of Scotland Group fell 30 cents, or 6 percent, to $4.86.
The news out of Deutsche Bank dragged European stocks lower, with Germany’s DAX closing down 1.5 percent, France’s CAC-40 index down 0.9 percent and the U.K.’s FTSE 100 index down 0.3 percent.
Pharmaceutical company Novavax plunged $6.93, or 83 percent, to $1.41 after the company said its experimental vaccine failed in late-stage clinical testing. Novavax has no active products on the market and this drug was their furthest in development.
Software company Oracle fell $2.01, or 5 percent, to $38.85 after the company’s quarterly results did not meet analysts’ expectations.
The S&P 500 is adding a new industry to its traditional groups for the first time since the dotcom era. The benchmark stock index will now have a real estate sector, which will be split off from the financial services component of the S&P 500. The new industry component will be effective at the end of trading Friday. After the split, the S&P 500 will have 11 industry sectors.
The 10 current sectors of the S&P 500 are: financial services, information technology, energy, industrials, consumer discretionary companies, materials, telecommunications, consumer staples, health care and utilities.
Chipmaker Intel rose 71 cents, or 2 percent, to $37.27 after the company raised its revenue forecasts, citing stronger-than-expected demand for personal computer chip products.
Benchmark U.S. crude lost 88 cents to $43.07 per barrel in New York. Brent crude, used to price international oils, fell 84 cents to $45.77 per barrel.
The yield on the 10-year Treasury note was mostly unchanged at 1.69 percent. The euro fell to $1.1162 from $1.246 and the dollar rose to 102.26 yen from 102.16 yen.