By Mike Bird 

U.S. stocks accelerated their declines in afternoon trading, reversing gains that followed the announcement of a prospective deal between major oil-producing nations to cut production levels.

The Dow Jones Industrial Average fell 172 points, or 0.9%, to 18167 and the S&P 500 lost 0.9%. The Nasdaq Composite fell 0.1%, weighed down by a second day of declines in biotechnology shares.

Some traders said the market was spooked by a report in Bloomberg News on how some funds that clear derivatives trades with Deutsche Bank have withdrawn some excess cash and positions held at the bank.

"The chatter is adding a lot of short-term fear right now, especially in the financials sector," said Jonathan Corpina, senior managing partner at Meridian Equity Partners. "

Deutsche Bank's U.S.-traded stock fell more than 7% in recent trading, while financial stocks in the S&P 500 dropped 1.2%.

The German lender's shares have been watched closely by investors following The Wall Street Journal's report that the bank has been asked to pay $14 billion by U.S. authorities to settle a set of high-profile mortgage-securities probes stemming from the financial crisis.

Meanwhile, oil prices rose, though analysts expressed cautioun about the impact of Wednesday's deal. U.S. crude-oil prices gained 1.5% to $47.78 a barrel after rising more than 5% a day earlier.

Shares of energy companies were near unchanged, a day after the S&P 500's energy sector had its biggest jump since January.

Utilities shares -- popular this year while rates have been low because they tend to pay steady dividends -- fell 1.7% in the S&P 500.

"If there's ever a perception that the Fed might raise rates, there's a bit of a pullback in equities and utilities become less attractive," said Ian Winer, head of the equities division at Wedbush Securities.

Fed funds futures, used by investors and traders to place bets on central-bank policy, rose slightly. They showed a 57% probability of an interest-rate increase from the Federal Reserve by December, according to data from CME Group, up from 53% a day earlier.

On Wednesday, Federal Reserve Chairwoman Janet Yellen said interest-rate increases were on the way but that there was "no fixed timetable."

Investors were also assessing the latest U.S. economic data.

The Commerce Department said Thursday that the U.S. economy grew at a faster pace in the second quarter than previously estimated. However, the latest data showed the expansion decelerated in the first half of the year.

Also, the number of Americans applying for first-time unemployment benefits rose last week but remained at a low level consistent with a generally healthy labor market, data from the Labor Department showed.

The yield on the 10-year Treasury note rose to 1.584%, according to Tradeweb, from 1.567% Wednesday.

The WSJ Dollar Index, which tracks the U.S. currency against 16 others, rose 0.3%.

Earlier, Asian shares rose following the OPEC news, led by a 1.4% climb for Japan's Nikkei Stock Average. The Stoxx Europe 600 was little changed after being up earlier on gains in oil-and-gas shares and basic-resources stocks.

Members of the Organization of the Petroleum Exporting Countries said they had proposed cutting their collective output to between 32.5 million and 33 million barrels a day, down from August levels of 33.2 million barrels a day. The group, however, deferred the task of completing a plan to make those cuts until November.

"We're not actually talking about a very large reduction here, it's more like a freeze at pretty high production levels," said Mike Bell, global market strategist at J.P. Morgan Asset Management. "It's very hard for oil to go much above $60 per barrel because U.S. producers pretty much all start to become profitable again."

In currency markets, the dollar rose 0.6% against the yen to Yen101.527. Bank of Japan Governor Haruhiko Kuroda gave a speech in early European hours, reiterating that the central bank could cut benchmark interest rates or expand asset purchases further.

--Daniel Huang contributed to this article.

Write to Mike Bird at Mike.Bird@wsj.com

(END) Dow Jones Newswires

September 29, 2016 13:31 ET (17:31 GMT)