* Deutsche Bank nears $5.4 bln settlement with DOJ - AFP
* S&P financials set for best day in two months
* Banks bolster S&P, Goldman drives Dow
* Indexes up: Dow 1.1 pct, S&P 1.01 pct, Nasdaq 0.99 pct
(Updates to late afternoon)
By Lewis Krauskopf
Sept 30 Wall Street rallied on Friday, lifted by
a surge in Deutsche Bank shares and financial stocks after
concerns eased about the health of the German bank.
The S&P financial sector gained 1.8 percent, putting
it on track for its best day in about two months.
Deutsche Bank's U.S.-listed shares jumped
15.2 percent, a day after sinking to a record low.
French news agency AFP reported that Deutsche Bank was
nearing a $5.4 billion settlement with U.S. officials over
charges related to selling toxic mortgage bonds.
Germany's largest bank has been engulfed by crisis after earlier
this month being handed a demand for up to $14 billion by the
Department of Justice.
U.S. stocks had sold off sharply on Thursday, after
Bloomberg reported that some hedge funds had withdrawn excess
cash and positions held at the German lender.
As investors assessed Deutsche Bank situation, "they
realized that it's maybe an overreaction to yesterday's selloff
and the concerns that they had comparing it to Lehman Brothers,"
said Alan Lancz, president of investment advisory firm Alan B.
Lancz & Associates in Toledo, Ohio.
The Dow Jones industrial average rose 199.46 points,
or 1.1 percent, to 18,342.91, the S&P 500 gained 21.71
points, or 1.01 percent, to 2,172.84 and the Nasdaq Composite
added 52.43 points, or 0.99 percent, to 5,321.58.
Bank stocks boosted the S&P. Bank of America and
Citigroup each climbed more than 3 percent and JPMorgan
rose 1.9 percent.
Goldman Sachs' 2 percent increase gave the Dow its
Eight of the 11 major sectors were higher. Energy shares
jumped 1.7 percent, with oil prices on track for big
With Friday's increases, the three major stock indexes were
all on pace for their third straight week of gains. The
benchmark S&P 500 is up about 6 percent for the year.
In other company news, Cognizant shares plunged
12.3 percent, making it the biggest loser among S&P 500
companies. The IT services provider said it was conducting an
internal investigation into possible violations of U.S.
anti-corrupt practices laws related to payments in India.
Advancing issues outnumbered declining ones on the NYSE by a
3.02-to-1 ratio; on Nasdaq, a 3.02-to-1 ratio favored advancers.
The S&P 500 posted 22 new 52-week highs and 3 new lows; the
Nasdaq Composite recorded 68 new highs and 32 new lows.
(Additional reporting by Yashaswini Swamynathan in Bengaluru;
Editing by Anil D'Silva and Nick Zieminski)