Stock Indices Can't Shake Negativity

Updated from 9:51 a.m. EDT

Stocks in New York opened Monday on a downbeat and continued trading in negative territory after the release of existing-home sales data and uncertainty about the fate of several struggling financial-services companies left investors without much buying enthusiasm.

The Dow Jones Industrial Average gave back 92 points to 11,536, and the S&P 500 slipped 9.5 points at 1283. The Nasdaq skidded 19 points to 2396.

On Friday, the markets closed with substantial daily gains following a report that troubled brokerage Lehman Brothers (LEH Quote) may have found a buyer in Korea Development Bank. Traders were also encouraged by statements from Federal Reserve Chairman Ben Bernanke that suggested the central bank would not be raising interest rates before the end of the year.

Before the new week's trading got underway, Korean financial regulators let some air out of the Lehman news, saying that Korea Development Bank should be careful when making such a risky purchase. Shares of Lehman were down 5.7%.

Mortgage firm Freddie Mac (FRE Quote), another focal point of the credit crunch, saw shares rise 10% early on Monday after the firm successfully sold $2 billion worth of three-month and six-month bonds. During the previous week, a less successful bond sale had investors worrying about the company's ability to raise capital.

Elsewhere in the financials, Fitch Ratings said insurance company and Dow member AIG (AIG Quote) may be set for a credit-rating downgrade as the agency continues to assess its business. Credit Suisse piled on, lowering earnings estimates for the company.