American International Group
weighed on what eventually ended on an up day for financial stocks.
The drama surrounding Lehman's search for a buyer drove the market for the biggest financial stocks.
The Financial Times
on Friday reported that
Bank of America
, private equity firm JC Flowers & Co. and China Investment Co. are weighing a joint bid for Lehman.
have also been cited elsewhere as possible buyers.
Lehman shares shed 77% over the course of the week to $3.65 at Friday's close, as investors' fears mounted about its liquidity situation. The federal government is involved in trying to find a solution to the mess, but Treasury Secretary Henry Paulson reportedly is "adamant" about using federal money in any deal as it did when it brokered the sale of
AIG, the mammoth insurer, shed 30.8% to $12.14 and Merrill Lynch dipped 12.3% to $17.05, as investors harbored fears that they could be the next financials to fall.
The Wall Street Journal
reported on late Friday that AIG may hold a conference call early Monday to announce a series of steps, including possible asset sales, after Standard & Poor's threatened to downgrade the company.
Next week, Lehman and fellow investment banks
report earnings. Goldman finished down 1.8% to $154.21 and Morgan Stanley finished 3.8% lower to $37.23.
Many financial stocks finished the Friday with gains, however. The NYSE Financial Sector Index finished up 0.08% to 6,267.57.
BofA was one winner, adding 2.1% to $33.74, despite the prospect of taking Lehman on.
This article was written by a staff member of TheStreet.com.