Rebound By Deutsche Bank Leads To Strength On Wall Street - U.S. Commentary

(RTTNews) - Stocks have moved notably higher over the course of the trading session on Friday, largely offsetting the pullback seen in the previous session. The rebound on the day comes as traders continue to keep a close eye on developments regarding Deutsche Bank (DB).

In recent trading, the major averages have moved roughly sideways, hovering firmly in positive territory. The Dow is up 168.54 points or 0.9 percent at 18,311.99, the Nasdaq is up 42.24 points or 0.8 percent at 5,311.39 and the S&P 500 is up 17.24 points or 0.8 percent at 2,168.37.

After helping to lead the markets lower during trading on Thursday, Deutsche Bank has shown a substantial move back to the upside on the day.

Shares of Deutsche Bank are currently jumping by 13.2 percent after plunging by 6.7 percent in the previous session to a record closing low.

The rebound by Deutsche Bank comes after AFP reported the German financial giant is nearing a $5.4 billion settlement with the U.S. Justice Department over its mortgage lending activities before the financial crisis.

On the economic front, the Commerce Department released a report before the start of trading showing an uptick in personal income in the month of August.

The report said personal income edged up by 0.2 percent in August after climbing by 0.4 percent in July. The modest increase in income matched economist estimates.

Meanwhile, the Commerce Department said personal spending was virtually unchanged in August following a 0.4 percent increase in July. Economists had been expecting spending to rise by 0.2 percent.

A reading on inflation said to be preferred by the Federal Reserve showed that core consumer prices rose by 0.2 percent in August, matching expectations. The annual rate of growth accelerated to 1.7 percent from 1.6 percent.

MNI Indicators also released a report showing a faster than expected acceleration in the pace of growth in Chicago-area business activity in September.

The Chicago business barometer jumped to 54.2 in September from 51.5 in August, with a reading above 50 indicating growth in regional business activity. Economists had expected the index to inch up to 52.0.

A separate report from the University of Michigan showed an improvement in consumer sentiment in the month of September.

The University of Michigan said its consumer sentiment index for September was upwardly revised to 91.2 from the preliminary reading of 89.8.

The final reading on the consumer sentiment index for September is up from 89.8 in August and above economist estimates for a reading of 90.1.

Sector News

Computer hardware stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Computer Hardware Index up by 2.2 percent. The gain has lifted the index to its best intraday level in over a year.

Printer maker Lexmark (LXK) is leading the hardware sector higher after U.S. regulators cleared its proposed buyout by an Asia-based consortium.

Significant strength is also visible among semiconductor stocks, as reflected by the 1.9 percent gain being posted by the Philadelphia Semiconductor Index. With the gain, the index has reached a sixteen-year intraday high.

Oil service stocks have also moved notably higher, driving the Philadelphia Oil Service Index up by 1.8 percent. The index has reached its best intraday level in a month.

Financial, railroad, and telecom stocks are also seeing considerable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index plunged by 1.5 percent and 1.9 percent, respectively, although China's Shanghai Composite Index bucked the downtrend.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index fell by 0.3 percent, the French CAC 40 Index inched up by 0.1 percent and the German DAX Index jumped by 1 percent.

In the bond market, treasuries have turned lower over the course of the session after seeing initial strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.4 basis points at 1.591 percent.