Wall St little changed as bank woes offset oil
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Thu, 11 Sep 2008 16:59:29 GMT |
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By Walter BrandimarteNEW YORK (Reuters) - Stocks were little changed on Thursday as concerns about the health of the financial system left investors averse to risk, offsetting the positive impact of another drop in the price of oil.Shares of Lehman Brothers sank as much as 46 percent after the struggling investment bank failed to announce definitive deals to raise much-needed capital to cover losses from tanking real estate investments.However, hopes that authorities might work out a plan to stabilize Lehman later surfaced, helping the entire financial sector trim losses. The S&P financial sector index <.GSPF> was down 1.6 percent after slumping more than 4 percent earlier."There is speculation that maybe there's going to be some kind of resolution with Lehman, maybe the Treasury steps in and gets some people together as you head towards the weekend so that there's some resolution by Monday," said Bobby Harrington, head of block trading at UBS in Stamford, Connecticut, adding:"It's just speculation. We don't know that for sure."The Dow Jones industrial average <.DJI> was down 34.36 points, or 0.30 percent, at 11,234.56, while the Standard &Poor's 500 Index <.SPX> edged down 2.13 points, or 0.17 percent, at 1,229.91. But the Nasdaq Composite Index <.IXIC>was up 2.18 points, or 0.10 percent, at 2,230.88.Shares of Lehman Brothers still plunged 37.5 percent to $4.53 while Washington Mutual Inc sank 9 percent to $2.11 as investors worried about the companies' mortgage-related losses, capital needs and survival prospects.Earlier on Thursday the U.S. Treasury Department, asked about the steep fall in Lehman stock, said it was continuing to monitor markets and was keeping in touch with market participants.The U.S. Federal Reserve declined to comment on Lehman, a day after the No. 4 U.S. investment bank failed to announce definitive deals to raise desperately needed capital.Shares of American International Group Inc fell 13.3 percent to $15.16 as investors fear the world's largest insurer may post another loss in the third quarter.Despite the persistent financial concerns, other banks' stocks turned positive. JPMorgan Chase rose 0.7 percent to $39.60 while Wells Fargo gained 2 percent to $32.34, both giving a major boost to the S&P 500.A fall of about 50 cents per barrel in the price of U.S. crude oil also supported the market, improving the outlook for inflation and corporate earnings. So far this month, oil prices have slid more than $13 to $102.08 a barrel.Among the biggest gainers on the S&P were shares of Allergan Inc , which jumped 10.8 percent to $60.49 after the company said its popular Botox wrinkle smoother worked as a treatment for adults suffering from chronic migraines as well, according to clinical data.(Additional reporting by Ellis Mnyandu and Steven C. Johnson; Editing by James Dalgleish)
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