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Published: Wed, September 21, 2016
Economy | By Melissa Porter

Deutsche Bank: No plan to pay $14B Justice Dept. settlement


Deutsche Bank's US -listed shares DB.N slumped 9.35 percent.

But the news of the massive U.S. demand hit the bank's stock, which dropped almost 7% in after-hours trading in the U.S. Its shares were already down 50% in the past year.

At 9:39 a.m. ET (1339 GMT), the Dow Jones industrial average was down 90.12 points, or 0.49 percent, at 18,122.36. The Standard & Poor's 500 index lost 14 points, or 0.7 percent, to 2,133 and the Nasdaq composite lost 21 points, or 0.4 percent, to 5,229.

Deutsche Bank gladly told shareholders in July that it planned to close its biggest pending legal cases this year, including one for its sales of residential mortgage-backed securities in the United States before the financial crisis.

News the US Department of Justice is seeking $14 billion from Deutsche Bank to settle civil claims over its handling of the mortgage-backed securities crisis sent the troubled German lender's shares reeling and back towards multi-year lows.

The energy index was a close second, declining 0.94 percent as oil prices fell 2.2 percent on worries of oversupply.

Bank fears spread: In London, shares of Royal Bank of Scotland PLC RBS, -2.94% RBS, -1.15% fell 4.1% and Barclays BARC, -2.09% BCS, +0.45% dropped 2.1%.

Also on traders' radar next week will be the Bank of Japan's own gathering after reports that it is planning to cut interest rates further into negative territory.

Another investor source, who declined to be named, said efforts by the bank's senior management team to set aside cash to cover the US fines had been complicated by accounting rules, which prohibited provisioning in the absence of solid data to support the estimate or guidance on timing. Experts believe there could be a rate hike before the end of the year, but say it will most likely happen in December.

Pharmaceutical company Novavax plunged $6.93, or 83%, to $1.42 after the company said its experimental vaccine failed in late-stage clinical testing.

Intel rose $1.11, or 3 percent, to $37.67 after the company raised its revenue forecasts, citing stronger-than-expected demand for personal computers.

OIL PRICES: Benchmark U.S. crude lost 53 cents to $43.38 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price worldwide oils, fell 83 cents to $45.76 per barrel. Dow components Goldman Sachs GS.N and JPMorgan JPM.N fell over 1 percent each. After the announcement of this news, the shares of the German banking giant fell by more than 6% in the after-hours trading.

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