US open: Stocks rebound as investors digest data

US stocks rebounded from the previous day’s decline as investors dusted off worries about Deutsche Bank and the broader financial sector.

At 1441 BST, the Dow Jones Industrial Average rose 0.52% to 18,239.16 points, the S&P 500 increased 0.41% to 2,160.26 points and the Nasdaq grew 0.31% to 5,285.50 points.

At the same time oil prices wavered as the market continued to assess OPEC’s agreement to limit production. West Texas Intermediate crude rose 0.60% to $48.12 per barrel while Brent dropped 0.18% to $49.15 per barrel.

On Thursday equities were under pressure as Deutsche Bank weighed down the financial sector following reports that a number of key funds had withdrawn money from the German lender, which currently faces a $14bn fine from the US Department of Justice for mis-selling mortgage-backed securities.

However, the stock pared some losses on reports of a letter sent to the bank’s employees by chief executive John Cryan.

Elsewhere, US data from the Commerce Departmnt showed personal income rose 0.2% in August, as expected by analysts. Personal spending was flat, compared to forecasts for a 0.1% increase.

Real personal spending dropped 0.1% in August, worse than forecasts for zero growth and driven largely by a decline in spending on durable goods.

“The 0.1% m/m decline in real spending in August means that if spending increased by a moderate 0.2% m/m in the final month of the quarter, real consumption growth for the quarter as a whole would be 2.7%, down sharply from 4.3% in the second quarter,” said Steve Murphy, US economist at Capital Economics.

Meanwhile, the core PCE deflator increased 1.0% year-on-year in August, up from 0.8% in July. Excluding food and energy, core prices rose by an annualised 1.7% in August, compared to 1.6% in July.

“There is little reason to think core inflation will rise much further in the months ahead, however, which suggests that the Fed will likely hold on until December before raising interest rates,” Murphy said.

Elsewhere, the final reading of the University of Michigan's consumer sentiment index showed a rise in September to a level of 91.2, up from 89.8 in August. Economists had expected a reading of 90.

In company news, Costco Wholesale shares jumped as its new deal to accept Visa cards meant lower credit card fees for customers.

Cognizant Technology Solutions Corp. tanked after the consulting company disclosed an internal investigation into whether certain payments it made to facilities in India violated the law.