On The Fly: Stocks end week little changed as Deutsche Bank roils markets

Stocks saw a sizable increase in volatility this week, but only a very small weekly increase in value, as Deutsche Bank (DB) took center stage. The German banking giant's troubles were front and center throughout the week and a swoon in its shares dragged down the financial sector and the broader market on Thursday. However, a rebound in the stock on Friday was paired with a bounce back in the major averages on Friday, helping the market eke out a small gain for the week. MACRO NEWS: In the U.S., new home sales dropped 7.6% to 609,000 unit rate in August. Personal income rose 0.2% in August, as expected. Consumer spending was unchanged, versus expectations for it to have grown 0.1%. The Chicago PMI rebounded 2.7 points to 54.2 in September, topping the 52.0 reading that was expected. The final September print from the University of Michigan survey showed consumer sentiment rose 1.4 points to 91.2, which was improved from the preliminary September reading and better than expected. Markit's services PMI rose 0.9 points to 51.9 in the September flash print. Orders for durable goods were unchanged in August. When excluding transportation products, sales declined 0.4%. The government revised its second quarter GDP growth estimate up to 1.4%. Initial jobless claims rose 3,000 to 254,000 in the week ended September 24. The pending home sale index fell 2.4% to 108.5 in August. The international trade in goods balance showed a $58.4B deficit in August. In Asia, Bank of Japan Governor Haruhiko Kuroda suggested in a speech that the Japanese central bank was prepared to push rates deeper into negative territory if needed to help meet its inflation target. Japan's retail sales fell 1.1% in August. Meeting in Algiers, OPEC members tentatively agreed to reduce their oil output beginning in November, according to media reports. The group is said to have agreed to limit production to 32.5 million barrels a day. In Europe, Germany's unemployment rate fell below 6% in September. COMPANY NEWS: Shares of Deutsche Bank dropped on Monday amid worries about its capital position after German Chancellor Angela Merkel ruled out government aid for the bank. The German bank, which faces a potential fine of as much as $14B in the U.S. over mortgage-securities investigations stemming from the 2008 financial crisis, denied that the company ever asked Merkel to intervene in the bank's dispute with the Justice Department. On Thursday reports emerged saying that hedge funds are cutting their exposure to the bank, sending the stock down even further. However, Deutsche Bank recouped some losses on Friday after Agence France-Presse reported, citing a source, that the bank is near a $5.4B settlement with the U.S. over its role in underwriting residential mortgage-backed securities in the run-up to the housing crisis. Additionally, Deutsche Bank CEO John Cryan, seeking to reassure the bank's staff, has told employees that the departure of any hedge fund clients was "small" compared to its 20M total customers, Reuters reported. According to the letter to employees seen by Reuters, Cryan addressed reports of the departure of "some few" hedge fund clients and blamed "certain forces" and "speculation" for the media coverage... Also in the banking space, Wells Fargo (WFC) continued to make headlines. CEO John Stumpf will forfeit much of his 2016 salary, including his bonus and $41M in unvested equity, as the company's independent directors launch an investigation into its retail banking practices. Meanwhile, California's State Treasurer announced a sweeping suspension of business relationships with the bank... Twitter (TWTR) gained another 2% this week after media reports emerged saying that Disney (DIS) is working with a financial adviser to explore a potential offer for the company. According to CNBC's David Faber, a sale of the company could happen within the next 30-45 days, with Microsoft (MSFT) also among the many suitors. Salesforce (CRM) is said to be considering an offer of its own and has retained Bank of America for the process, reports indicate... National Amusements, which controls the majority of CBS (CBS) and Viacom's (VIAB) voting stock, announced that it has asked the boards of the two media companies to consider a potential combination. Additionally, National Amusements said it will not accept any acquisition of the companies by a third party. In other M&A news, Qualcomm (QCOM) is said to be in talks to acquire NXP Semiconductors (NXPI), The Wall Street Journal reported. Chemtura (CHMT) accepted Lanxess' offer to buy the company for $33.50 per share... Rice Energy (RICE) agreed to acquire Vantage Energy for approximately $2.7B... Harmonic (HLIT) entered into a warrant agreement with Comcast (CMCSA, CMCSK) that provides the latter with the opportunity to acquire shares of common stock of Harmonic... Pfizer (PFE) announced that it will not pursue splitting Pfizer Innovative Health and Pfizer Essential Health into two, separate publicly traded companies at this time... The U.S. appeals court weighing American Express' (AXP) steering case, a dispute over whether the company can legally prohibit merchants from steering customers to cheaper cards, ruled in favor of the company. Additionally, the company's board of directors approved the repurchase of up to 150 million common shares and a 10% increase in the quarterly dividend... Caesars Entertainment (CZR) announced that it has struck a deal with most of its operating unit's creditors, paving the subsidiary's way out of a costly bankruptcy... Avis Budget (CAR) finance chief Dave Wyshner warned of disappointing summer sales in Europe amid terrorism concerns and other macro negatives, which he said negatively impacted pricing "across the industry." Aside from reporting quarterly results, giving a more upbeat view on its estimate for potential losses this fiscal year and announcing CFO James Yersh is leaving the company, BlackBerry (BBRY) said it will stop in-house development of phones and outsource its hardware efforts to its partners... Among companies that announced quarterly results this week, SYNNEX (SNX), PepsiCo (PEP), ConAgra Foods (CAG), and Pier 1 Imports (PIR) advanced following their reports, while Carnival (CCL), Nike (NKE), and Ferrellgas Partners (FGP) declined. INDEXES: For the week, the Dow added 0.16% to 18,308.15, the Nasdaq fell 0.03% to 5,312.00, and the S&P 500 edged up 0.19% to 2,168.27.