Wall Street fluctuates on financial concerns
NEW YORK » Wall Street closed mixed yesterday after investors largely shrugged off a jump in oil prices and focused instead on a bullish analyst call on Lehman Brothers Holdings Inc.
that eased worries about the financial sector.
Stocks ended off their lows of the session after a Ladenburg Thalmann analyst raised his rating on Lehman to "buy," saying he believes the nation's fourth-biggest investment bank has become a "hostile takeover candidate." That call helped ease concerns about that company as well as the financial sector, which has been hit by a spike in bad mortgage debt.
The Dow Jones industrial average rose 12.78, or 0.11 percent, to 11,430.21. The Dow managed a moderate gain on Wednesday after heavy losses the first two days of the week.
Broader stock indicators ended mixed yesterday. The Standard & Poor's 500 index rose 3.18, or 0.25 percent, to 1,277.72, and the Nasdaq composite index fell 8.70, or 0.36 percent, to 2,380.38.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.84 percent from 3.80 percent late Wednesday.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to a light 912 million shares compared with 1.07 billion shares traded Wednesday.
The Russell 2000 index of smaller companies fell 6.35, or 0.87 percent, to 725.25.
Gold prices jumped as the dollar moved lower against other major currencies.
Light, sweet crude surged $5.62 to settle at $121.18 a barrel on the New York Mercantile Exchange. Stocks recovered after oil retreated from a session high of $122.04.
Investors responded to yesterday's climb in oil by sending shares of energy companies higher. Exxon Mobil Corp. and Chevron Corp. showed the strongest performance among the 30 stocks that make up the Dow industrials. Exxon rose $1.54, or 2 percent, to $80.35, while Chevron rose $2.06, or 2.4 percent, to $88.52.
But the rise in oil also weighed on some sectors, such as airlines. United Airlines parent UAL Corp. fell $1.07, or 8.6 percent, to $11.33, while Continental Airlines Inc. fell 82 cents, or 5.4 percent, to $14.34.
With the focus on oil and financials, investors appeared unimpressed by a better-than-expected snapshot of demand at some factories. The Philadelphia Fed said regional manufacturing activity is increasing in August by more than it did in July.
Lehman ended down 1 cent at $13.72, while Goldman Sachs fell $1.83 to $156.42 and Morgan Stanley fell 34 cents to $37.06.
The fluctuations came a day after fresh worries emerged about the possibility of a government bailout of government-chartered mortgage companies Fannie Mae and Freddie Mac. Such a move could wipe out shareholder equity.
Fannie and Freddie ended mixed after falling more than 20 percent Wednesday. Fannie rose 45 cents, or 10 percent, to $4.85, while Freddie fell 9 cents, or 2.3 percent, to $3.06.