* Deutsche Bank nears $5.4 bln settlement with DOJ -AFP
* S&P financials tally best day in two months
* Banks bolster S&P, Goldman drives Dow
* Indexes up: Dow 0.91 pct, S&P 0.8 pct, Nasdaq 0.81 pct
(Updates to close of U.S. markets)
By Lewis Krauskopf
NEW YORK, 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 1.4 percent, its
best day in about two months.
Deutsche Bank's U.S.-listed shares jumped
14 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 receiving 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Bloomberg reported that some hedge funds had withdrawn excess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.
"The rumors that are out there that Deutsche Bank is going
to get a better deal... I think is adding some positive effect
into the market," said Jonathan Corpina, senior managing partner
for Meridian Equity Partners in New York. "I think people were
fearful and concerned about what the outcome of this is going to
The Dow Jones industrial average rose 164.7 points,
or 0.91 percent, to 18,308.15, the S&P 500 gained 17.14
points, or 0.8 percent, to 2,168.27 and the Nasdaq Composite
added 42.85 points, or 0.81 percent, to 5,312.00.
Bank stocks boosted the S&P. Bank of America and
Citigroup each climbed more than 3 percent and JPMorgan
rose 1.4 percent.
Goldman Sachs' 1.5 percent increase gave the Dow its
Eight of the 11 major sectors ended higher. Energy shares
climbed 1.3 percent, with oil prices recording big
With Friday's increases, the three major stock indexes
recorded their third straight week of gains.
The Deutsche Bank situation created a fresh risk for
investors, who will be watching third-quarter corporate earnings
and the upcoming U.S. presidential election over the next month
for reasons to buy or sell stocks.
For the year, the benchmark S&P 500 is up about 6 percent,
with U.S. equities benefiting from low interest rates around the
In other company news, Cognizant shares plunged
13.3 percent, making it the biggest loser among S&P 500
companies. The IT services provider said it was conducting an
internal investigation on possible violations of U.S.
anti-corrupt practices laws related to payments in India.
About 7.5 billion shares changed hands on U.S. exchanges,
above the 7.1 billion daily average for the past 20 trading
days, according to Thomson Reuters data.
Advancing issues outnumbered declining ones on the NYSE by a
2.40-to-1 ratio; on Nasdaq, a 2.69-to-1 ratio favored advancers.
The S&P 500 posted 25 new 52-week highs and 3 new lows; the
Nasdaq Composite recorded 97 new highs and 34 new lows.
(Additional reporting by Yashaswini Swamynathan in Bengaluru;
Editing by Nick Zieminski and Dan Grebler)