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Here are five things you must know for Friday, Sept. 30:
1. -- European stocks tumbled, Asian stocks finished mostly lower and U.S. stock futures fell Friday over concerns about the financial health of Germany's Deutsche Bank (DB) - Get Report , which saw its shares fall to a record low.
Deutsche Bank fell below the symbolically important €10 threshold in trading Friday but had clawed back some losses and was recently trading at €10.40, down 3.9%. The stock declined 6.7% on Thursday in New York after Bloomberg reported that a group of hedge funds that do derivatives business with the bank had reduced their exposure. The bank insisted once again on Thursday that it was well-capitalized.
"While these firms represent a fairly small part of the banks' clients, as a weather vane in the current febrile environment, it doesn't exactly represent a vote of confidence either," Michael Hewson, chief market analyst at CMC Markets, told te Associated Press.
Shares of Deutsche Bank have been reeling ever since authorities in the U.S. revealed they are seeking $14 billion from the bank to settle legal claims over its sales of mortgage securities in the run-up to the global financial crisis in 2008.
2. -- Federal Reserve Chair Janet Yellen didn't address the economy or the future path of interest rates on Thursday but did address a question at a forum about whether the Fed might one day expand the assets it purchases to include company stock and corporate bonds. By law, the Fed can only now purchase U.S. Treasury securities or mortgage-backed securities issued by government-sponsored enterprises.
Yellen, speaking by videoconference at a forum of minority bankers in Kansas City, Mo., noted that the Bank of Japan has the authority to purchase stocks and corporate bonds and the European Central Bank can buy corporate bonds. Having these expanded options might be handy if the Fed needs more tools to attack any future deep recession, she said.
"Many researchers are thinking what else could be on the shelf if we needed a wider range of tools," Yellen said, adding that while the Fed is not considering such a move now, she believes it is a useful area to explore for the future.
3. -- The economic calendar in the U.S. Friday includes Personal Income and Personal Spending for August at 8:30 a.m. EDT, Chiacgo PMI for September at 9:45 a.m., the University of Michigan (final) Sentiment Index for September at 10 a.m., and the Baker-Hughes weekly Rig Count at 1 p.m.
Dallas Federal Reserve President Rob Kaplan is scheduled to take part in a a Q&A at Stemmons Corridor Business Association's Annual Meeting in Dallas at 1 p.m.
4. -- NXP Semiconductors (NXPI) - Get Report was slipping 1.2% to $95 in premarket trading on Friday after jumping almost 17% on Thursday following a report that Qualcomm (QCOM) - Get Report was in talks to buy the Dutch chip giant in a deal that would likely sport a $30 billion-plus valuation and could be announced in the next two to three months.
Jim Cramer's charitable trust Action Alerts PLUS counts NXP among its holdings. In an alert to AAP subscribers following the report in The Wall Street Journal, Cramer and AAP co-manager Jack Mohr wrote: "Although we await incremental information before drawing a conclusion, we would expect the company to fetch at least $100-$115 a share in case of any takeover."
But Cramer and Mohr added that with NXP up sharply, "we will use the opportunity to take profits on one-third of the position, just in case the rumors aren't true and the stock comes right back down, where we will buy it back."
A Qualcomm-NXP deal could yield cost synergies by eliminating duplicate sales, administrative and R&D functions, and also give the combined company more pricing leverage with suppliers and customers.
Revenue in the quarter was $36.56 billion in the period, which was slightly below Wall Street forecasts of $36.57 billion.
Total comparable-store sales were flat during the period.