US close: Stocks slide amid worries about Deutsche Bank

US stocks finished lower on Monday on worries about Deutsche Bank and the implications of the UK’s exit from European Union.

The Dow Jones Industrial Average dropped 0.30% to 18,253.85 points, the S&P 500 fell 0.33% to 2,161.20 points and the Nasdaq shed 0.21% to 5,300.87 points.

At the same time oil prices rose on reports that Iranian President Hassan Rouhani stressed the importance of joining OPEC in trying to stabilise the market. West Texas Intermediate crude rose 0.82% to $48.64 per barrel and Brent jumped 1.2% to $50.80 per barrel.

Deutsche Bank’s US shares were under the cosh after surging on Friday following a report that it may be able to negotiate a lower settlement with the US Justice Department over its mis-selling of mortgage-backed securities.

On Monday, The Wall Street Journal reported that talks between the two were moving forward, but no deal has yet been presented to senior decision makers on either side. Deutsche Bank shares were not trading in Germany on Monday as markets there were closed for a public holiday.

Elsewhere, UK Prime Minister Theresa May said the formal Brexit negotiations will begin by March 2017, which would mean Britain’s exit from the European Union would happen by summer 2019.

On the data front, Markit’s final US manufacturing purchasing managers’ index fell to a three-month low of 51.5 in September from 52.0 in August. Still, this was a touch above the flash estimate of 51.4. A reading above 50 signals expansion.

Slower rates of output and new order growth were the main factors weighing on the headline index, which more than offset a stronger contribution from the staff hiring component.

Chris Williamson, chief business economist at IHS Markit, said: “Manufacturing growth slowed to a crawl in September, suggesting the economy is stuck in a soft-patch amid widespread uncertainty in the lead up to the presidential election. The survey saw firms pulling back on expanding production and focusing instead on cost-cutting, as inflows of new business slowed to the weakest seen so far this year.

Separately, the Institute for Supply Management said its manufacturing index rose to 51.5 in September from 49.4 in August, beating forecasts of 50.3.

“After a sharp fall in August, the rebound in the ISM manufacturing index to 51.5 in September should soothe fears that the US economy is headed for a serious downturn,” said Andrew Hunter, US economist at Capital Economics.

“Nevertheless, the index remains at a muted level and the other news today that construction spending contracted in both July and August shows that the factory sector is not the only misfiring part of the economy. As it stands now, we estimate that third-quarter GDP growth was between 2.0% and 2.5% annualised.”

Meanwhile, the Commerce Department revealed US construction spending fell 0.7% month-on-month to $1.142trn. Economists had been expecting a rise of 0.3% in comparison to July.

In company news, Telsa Motors shares reversed earlier gains after the electric car maker reported record quarterly sales.

Twitter shares rose after Bloomberg reported late Friday that Alphabet had hired an advisor to evaluate a bid to buy the social networking service site.

Shares in Janus Capital Group and Henderson Group rallied after announcing an all-share merger, which would give the investment management firms a combined market capitalisation of $6bn.

Shares in Netflix advanced on rumours the Walt Disney is considering a takeover of the online video streaming service.

Dow Jones - Risers

E.I. du Pont de Nemours and Co. (DD) $67.84 1.30%
United Technologies Corp. (UTX) $102.43 0.82%
Johnson & Johnson (JNJ) $118.81 0.58%
Boeing Co. (BA) $132.38 0.49%
Visa Inc. (V) $82.86 0.19%
Merck & Co. Inc. (MRK) $62.52 0.18%
General Electric Co. (GE) $29.64 0.07%
Nike Inc. (NKE) $52.67 0.04%
JP Morgan Chase & Co. (JPM) $66.51 -0.12%
Goldman Sachs Group Inc. (GS) $161.07 -0.12%

Dow Jones - Fallers

Travelers Company Inc. (TRV) $113.00 -1.35%
Procter & Gamble Co. (PG) $88.66 -1.21%
Unitedhealth Group Inc. (UNH) $138.47 -1.08%
International Business Machines Corp. (IBM) $157.61 -0.78%
Cisco Systems Inc. (CSCO) $31.50 -0.69%
Coca-Cola Co. (KO) $42.03 -0.69%
3M Co. (MMM) $175.04 -0.68%
McDonald's Corp. (MCD) $114.64 -0.62%
Pfizer Inc. (PFE) $33.68 -0.56%
Caterpillar Inc. (CAT) $88.24 -0.55%

S&P 500 - Risers

Cognizant Technology Solutions Corp. (CTSH) $50.40 5.64%
News Corp Class B (NWS) $14.93 4.99%
Netflix Inc. (NFLX) $102.63 4.14%
News Corp Class A (NWSA) $14.43 3.22%
American Airlines Group (AAL) $37.70 2.98%
Southwest Airlines Co. (LUV) $39.74 2.19%
Twenty-First Century Fox Inc Class A (FOXA) $24.73 2.11%
Endo International Plc (ENDP) $20.57 2.08%
Chesapeake Energy Corp. (CHK) $6.40 2.07%
Discovery Communications Inc. Class C (DISCK) $26.84 2.01%

S&P 500 - Fallers

Transocean Ltd. (RIG) $9.85 -7.60%
Air Products & Chemicals Inc. (APD) $140.57 -6.50%
Centene Corp. (CNC) $63.28 -5.45%
Teradata Corp. (TDC) $29.44 -5.03%
Tenet Healthcare Corp. (THC) $21.75 -4.02%
Federal Realty Inv Trust (FRT) $148.08 -3.80%
Newmont Mining Corp. (NEM) $38.10 -3.03%
Harley-Davidson Inc. (HOG) $51.00 -3.02%
McCormick & Co. (MKC) $97.10 -2.99%
DaVita Inc (DVA) $64.10 -2.98%

Nasdaq 100 - Risers

Cognizant Technology Solutions Corp. (CTSH) $50.40 5.64%
Tesla Motors Inc (TSLA) $213.70 4.74%
Netflix Inc. (NFLX) $102.63 4.14%
American Airlines Group (AAL) $37.70 2.98%
Twenty-First Century Fox Inc Class A (FOXA) $24.73 2.11%
Endo International Plc (ENDP) $20.57 2.08%
Discovery Communications Inc. Class C (DISCK) $26.84 2.01%
Biomarin Pharmaceutical Inc. (BMRN) $94.34 1.97%
Discovery Communications Inc. Class A (DISCA) $27.39 1.75%
Twenty-First Century Fox Inc Class B (FOX) $25.17 1.74%

Nasdaq 100 - Fallers

QUALCOMM Inc. (QCOM) $67.11 -2.03%
Autodesk Inc. (ADSK) $71.18 -1.59%
O'Reilly Automotive Inc. (ORLY) $276.08 -1.44%
Broadcom Limited (AVGO) $170.07 -1.42%
Gilead Sciences Inc. (GILD) $78.03 -1.38%
NetApp Inc. (NTAP) $35.36 -1.28%
Citrix Systems Inc. (CTXS) $84.16 -1.24%
Viacom Inc. Class B (VIAB) $37.69 -1.08%
Skyworks Solutions Inc. (SWKS) $75.33 -1.06%
eBay Inc. (EBAY) $32.56 -1.03%