Stocks rallied to the end of the week and the third quarter as banking shares got some much-needed relief. The euro rose, while yields on 10-year Treasuries closed slightly higher.
The S&P 500 added 0.8% while the Dow Jones Industrial Average climbed 0.91%. The Nasdaq Composite finished its best quarter in three years with a Friday gain of 0.81%.
In a strong finish to the week, Deutsche Bank AG (NYSE:DB), Lexmark International Inc (NYSE:LXK) and NXP Semiconductors NV (NASDAQ:NXPI) were three of Friday’s best stocks.
Deutsche Bank AG (DB)
The New York-listed shares of embattled German banking Deutsche Bank climbed 14% on more than eight times the average daily volume, just a day after the stock suffered one of its worst one-day losses in company history.
Shares of DB rose on speculation the company is close to reaching a $5.4 billion settlement with the U.S. Department of Justice related to a probe into mortgage-backed securities. The news is welcomed relief for DB, which has been tumbling after the Justice Department requested the bank pay $14 billion, far more than DB had set aside for legal issues.
In a note to employees Friday, Deutsche CEO John Cryan said the bank has the capital and liquidity to withstand market volatility. However, some hedge funds have recently severed ties with the bank due to concerns about its financial position.
Lexmark International Inc (LXK)
Shares of Lexmark International, the maker of printing and imaging products, jumped nearly 14% on more than 10 times the usual volume after the Committee on Foreign Investment in the United States cleared the way for LXK to be acquired by Chinese buyers.
In April, LXK agreed to be acquired by a Chinese group led by Apex Technology Co. Ltd. and PAG Asia Capital for $3.6 billion.
The CFIUS is requiring LXK and its suitors to “enter into a national security agreement with the departments of defense and homeland security,” according to MarketWatch.
NXP Semiconductors NV (NXPI)
NXP Semiconductors NV continued climbing a day after the stock surged on rumors QUALCOMM, Inc. (NASDAQ:QCOM) is interested in acquiring the company in a deal that could be valued at $30 billion or more.
Both stocks rose again Friday, with QCOM gaining almost 1.6% on volume that was more than quadruple the daily average, while NXPI added 6% on more than seven times the usual turnover.
J.P. Morgan analyst Rod Hall reiterated an “overweight” rating on NXPI and boosted his price target to $70 from $63.
“NXP was one of the top potential candidates on our list and we continue to believe a possible merger would make good strategic sense for Qualcomm,” the analyst said in a note posted by Barron’s.
As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities.
