US stocks end higher on week, after early wobble

THE US stock market finished slightly higher on the week, as Hillary Clinton's commanding debate performance and a production deal at the Organization of the Petroleum Exporting Countries (Opec) offset European banking fears.

Usually, Friday's September jobs report would be the pivotal moment of the first week of a new month, but investors will pay more attention to the latest threat to financial stability. Deutsche Bank has replayed almost line-for-line the tragic endings of investment banks Bear Stearns and Lehman Brothers.

First came the speculation that the bank was facing liabilities so large that it would not have enough cash on hand to meet them (in this case, a reported US$14 billion Department of Justice fine related, ironically, to the bank's conduct during the mortgage crisis). Then came the swirling rumours about hedge funds pulling their money out of the bank's prime brokerage, citing the risk of bank failure. Finally, there were the sudden intraday plunges of the bank's stock and bonds. In 2008 and 2009, this cycle was known as a "death spiral", akin to an institutional investors' run on the bank. Once the bank's stocks and bonds hint at distress, hedge funds take precautionary measures, which cause more panicky drops in the shares.