Stocks Shake Off Losses, Turn Higher
09/11/08 - 02:28 PM EDT
Mike Taylor
Updated from 12:22 p.m. EDT
Stocks in New York shook off early losses and headed higher Thursday afternoon, overcoming another day of weakness in the financial-services sector. Recently, the Dow Jones Industrial Average was tacking on 57 points at 11,326, and the S&P 500 was up 8 points at 1240. The Nasdaq was gaining 14 points to 2244. The Dow was more than 200 points above its session low. Wall Street went positive despite new selling in the financials. The Amex Securities Broker/Dealer index was off 0.7%, and the NYSE Financial Sector index was losing 0.8%. The KBW Bank index was slightly weaker. Sellers were having their way with shares of Lehman Brothers (LEH Quote - Cramer on LEH - Stock Picks) and Washington Mutual (WM Quote - Cramer on WM - Stock Picks), both of which continued to suffer on liquidity fears after taking heavy losses during Wednesday's trading. The Wall Street Journal reported that Lehman CEO Dick Fuld over the past week has been calling other financial firms to ensure they were still trading with his company. Fuld lately has been fighting rumors that Lehman will follow Bear Stearns, Fannie Mae(FNM Quote - Cramer on FNM - Stock Picks) and Freddie Mac (FRE Quote - Cramer on FRE - Stock Picks) as the next victim of the credit crisis, the report said. Analysts expressed extreme skittishness about the prospects for Lehman. Citigroup, Goldman Sachs and Oppenheimer all cut their ratings on the brokerage. Merrill Lynch replaced its neutral rating with "no opinion." Ratings agency Moody's said after the close Wednesday that Lehman will face a credit downgrade unless it partners with a stronger company. Lehman credit default swaps also rose sharply Wednesday. CNBC reported Thursday that Lehman CEO Dick Fuld is attempting to sell the entire company in the wake of apparent dissatisfaction with his plan to raise capital levels. Lehman shares were recently down 41%.
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