Stocks edge up on Lehman news

Wall Street struggles to post early gains after brokerage announces a nearly $4 billion quarterly loss.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Aaron Smith, CNNMoney.com staff writer

How much do you have saved for retirement?
  • Less than $50,000
  • Between $50,000 and $250,000
  • Between $250,000 and $500,000
  • More than $500,000
  • Nothing

NEW YORK (CNNMoney.com) -- Stocks gained early Wednesday as investors digested Lehman Brothers' steeper-than-expected quarterly loss and plans to clean up its balance sheet.

The Dow Jones industrial average (INDU), the Nasdaq composite (COMP) and the Standard & Poor's 500 (SPX) index all gained modestly in the first few minutes of trade.

Stocks had gotten pummeled Tuesday on worries about the solvency of Lehman Brothers, as well as AIG's ability to raise capital.

Lehman Brothers addressed some of those concerns Wednesday.

Lehman Brothers (LEH, Fortune 500) said it suffered a net loss of $3.9 billion in the third quarter, or $5.92 per share. A consensus of analysts interviewed by Thomson First Call had expected a decline of $3.35 per share.

Lehman said it was taking steps to reduce its residential mortgage exposure by 47% to $13.2 billion, reduce its commercial real estate exposure by 18% to $32.6 billion, and reduce its high yield acquisition finance exposure by 38% to $7.1 billion.

Shares of Lehman rose 2% in the first few minutes of trade after having risen as much as 28% in premarket marketing.

A Wednesday rally would be welcome news to investors, considering the Dow's 280-point plunge in the last session. Much of the hemorrhaging stemmed from anxiety over the finance sector. After reports that deal-making negotiations collapsed between Korean investors and Lehman Brothers Holdings (LEH, Fortune 500), the battered firm's stock dropped 45%.

Oil: Oil prices rose 77 cents a barrel to $104.02 after the Organization of Petroleum Exporting Nations agreed to trim daily overproduction by 520,000 barrels.

Also contributing to oil's rise were concerns that Hurricane Ike might disrupt oil production in the Gulf of Mexico. The hurricane could hit Texas by Friday or Saturday as a Category 3 storm.

Oil settled at a five-month low Tuesday.

Gasoline prices rose on Wednesday for the first time in 10 days to a nationwide average of $3.668 a gallon, up 1.6 cents from the day before, according to motorist group AAA.

The economic numbers for crude inventories for the week ended Sept. 6 will be released at 10:35 a.m. ET. Forecasts call for a drop in crude supplies of 3.9 million barrels, a decline in gasoline stocks of 4.7 million barrels and a drop in distillates of 2.3 million barrels.

International markets: European and Asian markets were driven lower by concerns over the financial markets. The dollar was up versus the euro, the yen and the British pound. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Want to buy -- and live in -- a piece of history? It's not that far out of reach. These historic homes are not only for sale, they are incredible bargains. More
5 ways retailers are tracking you If you think pesky salespeople are invading your personal space, check out these 5 technologies that are tracking your movements throughout a store. More
Moto X vs. Droid Turbo: Which Droid should you buy? Motorola has made the two best Android smartphones this year. Here's how they stack up. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.