Banks Lead U.S. Stock Recovery; Costco Lifts Consumer Stocks

NEW YORK (AP) -
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U.S. stocks are bouncing back Friday morning after a steep loss late the previous day. Banks are recovering from a sharp drop as Deutsche Bank tried to reassure investors about its financial health. Strong earnings from Costco are giving consumer stocks a lift, and energy companies are also trading higher.

KEEPING SCORE: The Dow Jones Industrial Average jumped 129 points, or 0.7 percent, to 18,272 as of 11 a.m. Eastern time. The Standard & Poor’s 500 index picked up 13 points, or 0.6 percent, to 2,164. The Nasdaq composite rose 30 points, or 0.6 percent, to 5,299.

BANKS BOUNCE BACK: Banks made some of the largest gains. The stocks tumbled Thursday afternoon as investors again worried about the health of Deutsche Bank, the largest lender in Germany, following reports that some hedge funds are moving their business out of the bank.

Late Thursday CEO John Cryan tried to calm investors. In a letter to Deutsche Bank employees, he said the bank has $241 billion in reserves and is meeting its capital requirements.

Deutsche Bank’s U.S.-listed stock rose 91 cents, or 7.8 percent, to $12.39. The stock has been pummeled this year and is trading near all-time lows. Among U.S. banks, JPMorgan Chase added 74 cents, or 1.1 percent, to $66.39 and Citigroup gained 93 cents, or 2 percent, to $46.73.

BIG SALE: Warehouse club operator Costco Wholesale jumped $6.03, or 4.1 percent, to $153.53 after it reported a profit that was larger than analysts had expected. Companies that make and sell household necessities also climbed. Procter & Gamble gained $1.23, or 1.4 percent, to $89.46 and Wal-Mart rose $1.38, or 2 percent, to $72.11.

OIL: Benchmark U.S. crude rose 35 cents to $48.17 per barrel in New York. Brent crude, the international benchmark, picked up 29 cents to $50.10 a barrel in London.

Oil prices have surged this week after the nations of OPEC, which collectively produce more than a third of the world’s oil, agreed to a small cut in production in a surprise decision. While the gains for oil prices have slowed, investors were still optimistic that energy companies will book larger profits as a result. Hess jumped 79 cents, or 1.5 percent, to $52.94 and Spectra Energy rose 52 cents, or 1.2 percent, to $42.84.

COGNIZANT CEO: Cognizant Technology Solutions tumbled after the information-technology consulting and outsourcing firm said it is investigating possible bribes paid to officials in India. Cognizant said it’s looking into potential violations of the Foreign Corrupt Practices Act and has informed the Department of Justice and the Securities and Exchange Commission.

Cognizant also said its president, Gordon Coburn, resigned. It named Rajeev Mahta, the former head of its IT Services business, as its new president. The stock fell $9.27, or 16.9 percent, to $45.73.

CHIPPING IN: Qualcomm and NXP Semiconductors continued to climb on reports that the companies might combine. The Wall Street Journal said Qualcomm is in talks to buy its rival, and NXP gained $7.85, or 8.2 percent, to $103.97 and Qualcomm picked up $2.14, or 3.2 percent, to $69.59. NXP surged 17 percent Thursday and Qualcom rose 6 percent.

TECH TRIUMPHANT: Major stock indexes set records this quarter, and tech stocks were by far the biggest reason. The S&P 500 technology index climbed 12 percent over the last three months, its best result since the end of 2013. Apple surged 18 percent, partly on indications of strong sales for the newest iPhones. Apple is the most valuable publicly traded company in the world. The second-largest tech company, Microsoft, is up 12 percent this quarter, and Google parent Alphabet leaped 14 percent.

DOUBLE-MENTOR: Mentor Graphics climbed $1.42, or 5.8 percent, to $26.11 after a fund tied to activist investor Paul Singer doubled its stake in the hardware and software design products company. In an SEC filing, Elliott Associates said it now owns 8.1 percent of Mentor’s stock up, from 4 percent.

STRONG FLAVOR: Spices-and-seasonings company McCormick reported a bigger-than-expected profit and raised its estimates for the year. The stock gained $2.85, or 2.9 percent, to $100.24.

PRINT IT: Printer maker Lexmark rose $4.76, or 13.6 percent, to $39.89 after it said U.S. regulators approved its sale to Apex Technology and PAG Asia Capital. The firms agreed to buy Lexmark in April for $40.50 a share, or $2.5 billion, and Chinese regulators have yet to approve the deal.

BONDS: Bond prices slipped. The yield on the 10-year Treasury note rose to 1.58 percent from 1.56 percent.

CURRENCIES: The dollar rose to 101.29 yen from 101.07 yen. The euro rose to $1.1231 from $1.1216.

OVERSEAS: France’s CAC 40 sank 0.6 percent and the FTSE 100 in Britain lost 0.5 percent. Germany’s DAX fell 0.1 percent after a slip on Thursday. Major indexes in Asia slumped on concerns about the banking industry. Japan’s Nikkei 225 slumped 1.5 percent and South Korea’s Kospi fell 1.2 percent. Hong Kong’s Hang Seng index sank 1.9 percent.