Business

Deutsche Bank fall drags down US stocks

Traders at New York Stock Exchange Image copyright Reuters

US stocks finished lower on Thursday after Deutsche Bank shares tumbled in New York following a report that some funds had withdrawn money.

The German lender fell nearly 7% after Bloomberg reported some hedge funds had taken out cash and withdrawn positions held with Deutsche's investment bank.

It added that the majority of Deutsche Bank's trading clients made no changes.

The report still unsettled other bank stocks, sending Goldman Sachs down 2.8% and JP Morgan 1.6% lower.

Deutsche Bank said in a statement: "Our trading clients are among the world's most sophisticated investors."

The bank added: "We are confident that the vast majority of them have a full understanding of our stable financial position, the current macro-economic environment, the litigation process in the US and the progress we are making with our strategy."

Mis-selling scandal

There has been speculation that Deutsche Bank may struggle to pay a $14bn US fine for mis-selling mortgage-backed bonds during the financial crisis.

The fall in Deutsche Bank and other finance stocks helped to push the Dow Jones Industrial Average index down 200 points, or 1.1%, to finish at 18,143 points.

The more tech-heavy Nasdaq was down 1% to 5,269 and the broader S&P 500 index was also 1% lower at 2,151 after making tentative gains in early trading.

Oil firms Chevron and Exxon Mobil fell 0.9% and 0.5% respectively as traders questioned whether an output cut agreed by the Opec oil cartel would be binding.

On Wednesday, they benefited from a surge in the oil price after reports emerged that Opec nations had agreed to the first production cut in eight years.

More on this story