US close: Stocks end in the red as Deutsche Bank slumps

The Dow Jones Industrial Average closed down 1.1%, while the S&P 500 and the Nasdaq fell 0.9%.

Worries about the banking sector undermined sentiment, with US-listed shares of Deutsche Bank tumbling amid reports that a number of key funds have cut their exposure to the German lender, which is currently facing a $14bn fine from the US Department of Justice for mis-selling mortgage-backed securities. Shares in the bank have been under the pressure this week amid fears that the fine could lead to its collapse.

Meanwhile, oil prices settled higher following a choppy session despite analysts expressing caution over the outcome of the OPEC meeting. During a meeting in Algeria on Wednesday, ministers agreed to cut production to between 32.5m and 33m barrels a day, down from August output levels of 33.5m barrels. Further details of the agreement will be discussed at the next meeting on 30 November.

West Texas Intermediate was up 1.5% to $47.73 a barrel and Brent crude was up 0.8% at $48.10.

Ranko Berich, head of market analysis at Monex Europe, said: “OPEC’s agreement to cut production came as a complete surprise to markets last night, but it’s interesting that Brent has failed to breach the $50/barrel level that has acted as resistance in recent months.

“It’s also worth noting that USD, which was influenced heavily by the initial 2014 falls in crude oil prices, did not weaken noticeably on yesterday’s events. It appears that market participants remain sceptical of OPEC’s mettle, and if the cuts announced will be sufficient to clear the current supply glut in crude.”

Investors also had a deluge of data to sift through on Thursday.

US gross domestic product rose an annual seasonally-adjusted 1.4% in the second quarter, according to the final release from the Commerce Department, up from August’s forecast of 1.1% growth. Economists had expected a 1.3% increase.

“With the data confirming continued progress for the US, one would expect expectations of a rate hike to rise in line with the improving economy,” said Tom Floyd, senior sales trader at Foenix Partners.

“However, with the next Fed meeting due in November, the same month as the US election, a hike then would be surprising (despite the Fed’s supposed non-partisan remit) with a rise most likely to occur in December at the earliest.”

Separately, data showed initial jobless claims rose by 3,000 to a seasonally adjusted 254,000 in the week ended 24 September, versus expectations of 260,000 claims.

Elsewhere, figures from National Association of Realtors revealed that US pending home sales dropped 2.4% in August compared to a month ago following a 1.2% increase in July. Analysts had expected no change.

Meanwhile, Atlanta Federal Reserve President Dennis Lockhart said he expected the central bank would raise interest rates "before long". In a speech in Florida, Lockhart added that he supported the Fed’s decision last week to leave interest rates unchanged until the economy shows further evidence of improvement.

At another event in Dublin, Philadelphia Fed President Patrick Harker said it was time for other policy areas to do their bit to encourage growth as the Fed has already played a large part.

"The American economy has reached a point where monetary policy has done what it can," he said.

"As everyone in this room knows, the reach and arsenal of monetary policymakers is limited... Addressing issues of unemployment from the decline in American manufacturing requires fiscal policy and legislative action."

In corporate news, PepsiCo shares gained after the soft drink giant raised its earnings forecast for the year and reported a surprise increase in core profit in the third quarter.

Qualcomm was also in the black after the Wall Street Journal reported that the company was in talks to buy Dutch group NXP Semiconductors.

ConAgra Foods rallied as it reported quarterly profit that exceeded analysts’ expectations.

Pier 1 was higher after it [posted a second-quarter loss that wasn’t as bad as analysts had expected.

Progress Software fell sharply after its third-quarter sales and earnings released late on Wednesday missed analysts’ expectations.

S&P 500 - Risers
ConAgra Foods Inc. (CAG) $46.25 +7.23%
QUALCOMM Inc. (QCOM) $67.45 +6.30%
Transocean Ltd. (RIG) $10.63 +6.09%
Murphy Oil Corp. (MUR) $30.33 +4.91%
Marathon Oil Corp. (MRO) $15.90 +4.74%
Hess Corp. (HES) $52.15 +4.63%
Accenture Plc (ACN) $121.64 +4.28%
Helmerich & Payne Inc. (HP) $65.26 +3.95%
Diamond Offshore Drilling Inc. (DO) $17.82 +3.73%
Devon Energy Corp. (DVN) $43.04 +3.51%

S&P 500 - Fallers
Chesapeake Energy Corp. (CHK) $6.12 -9.33%
Marathon Petroleum Corporation (MPC) $39.74 -6.80%
Endo International Plc (ENDP) $20.93 -6.40%
Tesoro Corp. (TSO) $77.57 -6.38%
Valero Energy Corp. (VLO) $51.71 -6.17%
United States Steel Corp. (X) $19.01 -5.56%
Mallinckrodt Plc Ordinary Shares (MNK) $68.99 -4.80%
Mylan Inc. (MYL) $38.47 -4.35%
Vertex Pharmaceuticals Inc. (VRTX) $85.00 -4.32%
Robert Half International Inc. (RHI) $37.02 -4.19%

Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $87.47 +1.02%
Verizon Communications Inc. (VZ) $52.12 +0.12%

Dow Jones I.A - Fallers
Goldman Sachs Group Inc. (GS) $158.95 -2.75%
Merck & Co. Inc. (MRK) $61.91 -2.20%
Nike Inc. (NKE) $52.16 -2.05%
Pfizer Inc. (PFE) $33.32 -1.97%
Johnson & Johnson (JNJ) $117.27 -1.78%
JP Morgan Chase & Co. (JPM) $65.65 -1.59%
Apple Inc. (AAPL) $112.17 -1.56%
Unitedhealth Group Inc. (UNH) $138.32 -1.49%
Wal-Mart Stores Inc. (WMT) $70.73 -1.48%
Procter & Gamble Co. (PG) $88.23 -1.37%

Nasdaq 100 - Risers
Nxp Semiconductors Nv (NXPI) $96.12 +16.88%
QUALCOMM Inc. (QCOM) $67.45 +6.30%
Viacom Inc. Class B (VIAB) $37.77 +3.31%
eBay Inc. (EBAY) $32.30 +1.41%
Broadcom Limited (AVGO) $172.46 +1.03%
Priceline Group Inc (PCLN) $1,472.98 +1.03%
Nvidia Corp. (NVDA) $67.40 +0.93%
Micron Technology Inc. (MU) $17.54 +0.57%
Maxim Integrated Products Inc. (MXIM) $39.49 +0.51%
Western Digital Corp. (WDC) $58.27 +0.45%

Nasdaq 100 - Fallers
Endo International Plc (ENDP) $20.93 -6.40%
Mylan Inc. (MYL) $38.47 -4.35%
Vertex Pharmaceuticals Inc. (VRTX) $85.00 -4.32%
Biomarin Pharmaceutical Inc. (BMRN) $92.78 -3.38%
Liberty Global plc Series A (LBTYA) $32.82 -3.04%
Regeneron Pharmaceuticals Inc. (REGN) $406.36 -3.04%
Liberty Global plc Series C (LBTYK) $31.85 -3.01%
Alexion Pharmaceuticals Inc. (ALXN) $120.06 -2.99%
Baidu Inc. (BIDU) $182.23 -2.93%
Celgene Corp. (CELG) $102.77 -2.89%