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Stocks rise moderately in session

Three major indexes end the day higher, but worries over a Lehman Bros. plan weigh down the financial sector.

September 11, 2008|Tim Paradis | The Associated Press

Stocks rebounded moderately Wednesday as shares of energy, raw-material and consumer-staple companies advanced but the financial sector extended its decline.

Bank and brokerage stocks finished lower after Lehman Bros. said it planned to sell a majority stake in its investment management business and spin off its troubled mortgage assets.

An index of financial stocks in the Standard & Poor's 500 stock index fell 0.7%. On Tuesday, the gauge tumbled 6.6% as worries about Lehman triggered a broad sell-off.

The Dow Jones industrial average rose 38.19 points, or 0.3%, to close at 11,268.92 after dipping briefly into negative territory, rising nearly 150 points and then retreating again.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 7.53 points, or 0.6%, to 1,232.04, and the Nasdaq composite index rose 18.89 points, or 0.9%, to 2,228.70.

The Dow fell 2.4% on Tuesday, erasing big gains logged Monday, while the S&P 500 fell 3.4% and the Nasdaq composite index lost 2.6%.

The Russell 2,000 index of smaller-company stocks rose 9.87 points, or 1.4%, to 717.16.

Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange.

Yields on government bonds rose Wednesday after tumbling Tuesday. The benchmark 10-year Treasury note climbed to 3.63% from 3.57% late Tuesday. The dollar moved higher against most other major currencies.

Oil, gold and most other commodities continued their recent slide. The CRB index of 19 commodities fell 0.7%, its ninth daily decline in a row. The near-term crude futures contract fell 68 cents to settle at $102.58 a barrel on the New York Mercantile Exchange. Oil is down nearly $13 a barrel this month.

Nonetheless, energy and raw-material stocks increased sharply Wednesday as some investors concluded that they had fallen enough to make their prices attractive.

An index of energy stocks in the S&P 500 jumped 3.6% after tumbling 6.4% on Tuesday. An S&P index of raw-material stocks rose 1.9% on Wednesday after dropping 4.6% on Tuesday.

On Wednesday, Exxon Mobil rose $1.99, or 2.7%, to $75.25, while Chevron advanced $2.37, or 3%, to $81.16. U.S. Steel gained $6.36, or 6.8%, to $100.05, while Freeport-McMoRan Copper & Gold rose $4.02, or 6.2%, to $69.18.

In the financial sector, Washington Mutual sank 98 cents, or 30%, to $2.32 after Standard & Poor's said it might downgrade the thrift's debt and the news about Lehman raised worries about other financial institutions.

In other market highlights:

* Wal-Mart Stores advanced 89 cents to close at $62.02 after setting a new 52-week high of $62.48; the previous high was $62.36.

* FedEx rose $3.11, or 3.7%, to $87.86 after the package delivery company said it expected its fiscal first-quarter profit to top its own forecast because of lower fuel costs and efforts to trim expenses.

* Overseas, key stock indexes fell 0.4% in Japan, 0.9% in Britain, 0.4% in Germany and 0.2% in France.

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