Stocks finish session mixed with energy up, Lehman down
NEW YORK» Stocks finished another volatile session narrowly mixed yesterday, as gains in the energy, utilities and materials sectors offset some of Wall Street's angst over the fate of Lehman Brothers Holdings Inc.
The three major indexes all managed to end the week higher.
The troubles of the financial sector dominated trading, as investors tried to glean insights into Lehman's race to sell itself or otherwise regain Wall Street's confidence.
The company's shares have spiraled lower this week, heaping pressure on executives at the No. 4 U.S. investment bank to line up a buyer or source of fresh cash.
Lehman shares - which tumbled 42 percent Thursday and are down more than 94 percent for the year - fell another 57 cents, or 13.5 percent, to $3.65 yesterday.
The market is anticipating that Lehman will arrive at a deal over the weekend, said Ryan Larson, senior equity trader at Voyageur Asset Management. Lehman, the government and other banks have been declining to comment officially on the issue, but bankers and industry executives have been saying that Lehman is working feverishly to find a buyer.
Closure on the issue would be better than none, but it won't likely be an antidote for the turbulent market, Larson said.
"Once this deal gets done," Larson said, "you'll see sentiment shift to: Who's next?"
An unexpected slowdown at cash registers last month also weighed on the stock market yesterday, particularly on shares of retailers and other consumer discretionary stocks. The U.S. Commerce Department said retail sales fell by 0.3 percent in August.
The Dow fell 11.72, or 0.10 percent, to 11,421.99, after falling more than 150 points in the early going.
Broader stock indicators also came well off their lows. The Standard & Poor's 500 index rose 2.65, or 0.21 percent, to 1,251.70, and the Nasdaq composite index rose 3.05, or 0.14 percent, 2,261.27.
Declining issues outnumbered advancers by about 9 to 7 on the New York Stock Exchange, where volume came to 1.31 billion shares.
The Russell 2000 index of smaller companies rose 1.26 or 0.18 percent, to 720.26.
The Dow finished the week up 1.79 percent; the S&P finished up 0.76 percent; and the Nasdaq ended up 0.24 percent.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.73 percent from 3.64 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 31 cents to settle at $101.18 a barrel on the New York Mercantile Exchange after briefly crossing below the $100 mark for the first time in five months. Investors tracked Hurricane Ike, which churned across the Gulf of Mexico toward the Texas coast and refining and drilling operations in the region.
Worries about risky debt have been hitting other financial stocks this week.
"I think everyone talks about more shoes to drop, and of course there have been a couple of those this week with Fannie and Freddie and Lehman. Hopefully it means we'll be getting closer to the end," said Russell Croft of Croft Value Fund.