U.S. stocks up on oil rebound; Nikkei dives 5%
stock board showing Japan's Nikkei 225 in Yokohama,
near Tokyo, Feb. 10, 2016.
Oil help stoke the rebound, which actually started
Thursday afternoon when the Dow pulled out of a steep
dive and nearly cut a 412-point loss in half by the close.
A barrel of U.S.- produced crude was up more than 7%
to more than $28 a barrel.
Also helping was news that giant German bank Deutsche
Bank announced plans to buy back more than $5 billion
in debt to help cool market jitters about its financial
health. Concerns about European banks have been one
of the reasons U.S. stocks have had such a rocky week.
Earlier, Tokyo's Nikkei 225 index dived, sending other
Asian markets lower, while European markets opened
higher following a rebound in the price of oil. U.S. stock
futures pointed higher.
The Japanese benchmark sank 4.8% to finish at
14,952.61 after plunging as much as 5.3% earlier, after
a sell-off in banking shares roiled investors in the U.S.
and Europe. Shares were also weighed down by a surge
in the yen's value to 110.99 yen against the dollar,
but that gain had largely evaporated by the time trading
began in Asia on Friday.
Hong Kong's Hang Seng fell 1.2% to 18,319.58, South
Korea's Kospi lost 1.4% to 1,835.28 and Australia's S&P/
ASX 200 dropped 1.2% to 4,765.30. Shares in New
Zealand and Southeast Asia also fell. Markets in China
and Taiwan are closed until Monday for Lunar New
Year holidays.
In Europe, Germany's DAX index rose 1.6%, France's
CAC 40 gained 1.3% and Britain's FTSE 100 was up
1.7%.
The economy of the 19-nation eurozone grew by 0.3% in
last 3 months of 2015, figures showed Friday,
following news that Germany expanded by a quarterly
rate of $30%
Oil prices bounced back from 13-year lows Friday. A barrel
of benchmark New York crude was up 4.4% at
$27.35. Brent crude, a benchmark for international oils,
gained 4.2% to $31.33 a barrel.
It has been a tumultuous week for financial markets. The
latest turmoil has centered on the stocks of banks,
whose profits are threatened by slowing growth and the
slump in oil prices.
"The slump in share markets is increasingly looking to be
feeding on itself as investors fret that financial turmoil
will bring on a recession and cause big problems for banks
which in turn drives more selling of shares," Shane Oliver
of AMP Capital said in a market commentary.
Investors spooked by plunging bank stocks in Europe, a
further slide in oil prices and angst over Federal Reserve
interest rate policy dumped stocks Thursday and fled to
the safety of havens such as U.S. government bonds
and gold.
Fed Chair Janet Yellen voiced confidence in the U.S.
economy in testimony to Congress on Thursday, but
acknowledged risks, saying it was too early to tell
whether they are severe enough to alter the central
bank's interest rate policies.
That failed to reassure investors hoping the Fed would
signal that rate hikes are off the table for this year,
with financial companies taking the biggest hit.
Stocks tumbled Thursday as the Dow fell for a fifth
straight day but cut losses as the blue-chip index came
back from a 400-point drop to close down 255 points.
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