- The Washington Times - Thursday, September 11, 2008

NEW YORK | Stocks ended a temperamental session moderately higher Wednesday as investors bought up shares of energy, materials and consumer-staple companies, but remained cautious about the beleaguered financial sector.

Bank and brokerage stocks finished mostly lower after Lehman Brothers Holdings Inc. said it plans to sell a majority stake in its investment management business and spin off its troubled mortgage assets.

On Tuesday, unease about Lehman touched off a broad selloff on worries that the No. 4 U.S. securities company had few options to raise capital. The already beaten down stock lost nearly half its value Tuesday as investors fretted the company would succumb to soured mortgage debt and other financial ills.

Bargain-seeking investors often pick over hard-hit stocks after big pullbacks, so some buying wasn’t surprising Wednesday. Investors bought up energy names after they tumbled Tuesday and looked to defensive areas like consumer staples.

But Lehman shares fell another 54 cents, or 6.9 percent, to close at $7.25, after plummeting 45 percent on Tuesday.

The Dow Jones Industrial Average rose 38.19, or 0.34 percent, to 11,268.92, after dipping briefly into negative territory, rising by nearly 150 points, and then pulling back again.

Broader stock indicators also rose. The Standard & Poor’s 500 Index rose 7.53, or 0.61 percent, to 1,232.04, and the Nasdaq Composite Index rose 18.89, or 0.85 percent, to 2,228.70.

The Dow fell 2.4 percent Tuesday, essentially erasing big gains logged Monday, while the S&P; 500 fell 3.4 percent and the Nasdaq Composite Index lost 2.6 percent.

Bond prices fell Wednesday after a run-up Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.63 percent from 3.59 percent late Tuesday. The dollar moved higher against most other major currencies, while gold prices fell.

Oil fell in fractious trading as strength in the dollar and indications of a weakening economy overshadowed OPEC’s decision to cut back excess production. Light, sweet crude fell 68 cents to settle at $102.58 per barrel on the New York Mercantile Exchange.

Wall Street has grappled with worries about the financial sector since the near-collapse and subsequent sale of Bear Stearns Cos. in March. Banks such as Lehman have struggled in the past year with unwieldy amounts of mortgage-backed securities and other risky investments on their books that have plunged in value.

Many Wall Street observers contend the stock market will not be able to carve out a sustained recovery until investors can determine the scale of losses in the financial sector. Global banks have written off more than $300 billion in bad investments.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide