Stocks slide, pulled down by bank shares and oil prices

Stocks closed moderately lower Friday, pushed down in part by the price of oil. Investors continue to remain on edge regarding the possibility of the Federal Reserve raising interest rates at its meeting next week.

Banks also fell, led by a plunge in Deutsche Bank after the giant German lender said it wouldn’t settle with the U.S. Justice Department over its handling of mortgage securities in the run-up to the 2008 financial crisis.

The Dow Jones industrial average fell 88.68 points, or 0.5%, to 18,123.80. The Standard & Poor’s 500 index fell 8.10 points, or 0.4%, to 2,139.16 and the Nasdaq composite fell 5.12 points, or 0.1%, to 5,244.57.

The U.S.-listed shares of Deutsche Bank dropped 9% to $13.38 after the bank said it did not intend to pay the $14-billion settlement the U.S. government asked for. Federal regulators have been looking to settle with Deutsche Bank, as they have done with the other major Wall Street firms such as Goldman Sachs and JPMorgan Chase, for its role in the mortgage bubble and financial crisis.

Other European banks fell as well. Royal Bank of Scotland Group sank 6% to $4.86.

The news out of Deutsche Bank dragged European stocks lower, with Germany’s DAX closing down 1.5%, France’s CAC-40 index down 0.9% and Britain’s FTSE 100 index down 0.3%.

Stocks have been volatile this week, with the Dow moving more than 100 points four out of five days. Most of the volatility has come as investors prepare for next week’s Fed meeting. Although most observers do not expect a rate increase, they recognize there is a small possibility there will be one.

“By the Fed’s own criteria, everything is in place for them to raise rates. But still, people don’t think they are going to raise rates, so the market is in conflict,” said David Kelly, chief global investment strategist at JP Morgan Asset Management.

Meanwhile, pharmaceutical firm Novavax plunged 85% to $1.29 after the company said its experimental vaccine failed in late-stage clinical testing. Novavax has no active products on the market and this drug was its furthest in development.

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

At the end of trading Friday, the Standard & Poor’s 500 added a new industry to its traditional groups for the first time since the dot-com era. The benchmark stock index gained a real estate sector, which was split off from the financial services component.

The S&P 500 now has 11 sectors. The 10 others are financial services, information technology, energy, industrials, consumer discretionary companies, materials, telecommunications, consumer staples, healthcare and utilities.

Benchmark U.S. crude fell 88 cents to $43.03 a barrel. Brent crude, used to price international oils, fell 82 cents to $45.77 a barrel. Heating oil fell 1 cent to $1.41 a gallon, wholesale gasoline rose 3 cents to $1.46 a gallon and natural gas rose 2 cents to $2.948 per 1,000 cubic feet.

The yield on the 10-year Treasury note was mostly unchanged at 1.69%. The euro fell to $1.1151 from $1.246 and the dollar rose to 102.42 yen from 102.16 yen.

Gold fell $7.80 to $1,310.20 an ounce, silver fell 18 cents to $18.86 an ounce and copper was unchanged at $2.16 a pound.

UPDATES:

2:20 p.m.: This article was updated with closing prices and additional information.

8:10 a.m.: This article was updated with current market information.

This article was originally published at 7 a.m.