U.S. Stocks Rise At The Start On Lehman's Salvage Plan
NEW YORK (MarketWatch) -- U.S. stock indexes opened higher on Wednesday as investors found some solace in Lehman Brothers Holdings Inc.'s plan to shore up its finances and chipmaker Texas Instruments affirmed its outlook.
The Dow Jones Industrial Average rose 51.14 points to 11,281.87.
The S&P 500 gained 7.1 points to 1,231.61, while the Nasdaq Composite climbed 17.26 points to 2,227.07.
The worries on Tuesday centered around Lehman Brothers , which dropped 45% on concerns over the investment bank's ability to raise capital to counter growing losses.
Lehman Brothers reported a $3.9 billion loss for the third quarter, and said it would spin off the "vast majority" of its commercial real estate assets into a new company.
Earlier, the Korea Development Bank issued its own statement on Wednesday saying talks collapsed over price and the broader market.
Lehman shares gained 5.4%. .
That's not the only financial-sector deal to have collapsed: GFI Group said merger talks with Tullett Prebon ended.
Oil futures got a lift after OPEC's surprise decision to reduce production quotas by roughly 500,000 barrels a day. However, the International Energy Agency cut its estimates of 2008 and 2009 global oil demand. Weekly energy inventory data also is due for release.
Oil futures rose 99 cents to $104.20 a barrel in electronic trade on Globex.
Shares of ImClone rose 7.5% after the biotechnology company said it had received an offer of $70 a share from an unspecified company, topping last month's bid of $60 a share from Bristol-Myers Squibb Co. . .
FedEx Corp. gave an updated forecast, as the hard-hit parcel service lifted its fiscal first-quarter earnings view to $1.23 from a previous estimate of 80 cents to $1 a share, citing the recent drop in oil prices.
And, chipmaker Texas Instruments Inc. said it expects third-quarter sales of $3.33 billion to $3.47 billion, compared with its previous range of $3.26 billion to $3.54 billion. The company also said it foresees earnings of 42 cents to 46 cents a share. It had expected 41 cents to 47 cents a share.
"The company indicated that all segments were tracking consistent to expectations and that, unlike last quarter, it has a good handle on distributor plans," said Deutsche Bank analysts.
Asian and Europe markets lost ground, with the Nikkei 225 slipping 0.4% in Tokyo and the FTSE 100 losing 0.9% in London.
On Tuesday, U.S. stocks ended sharply lower, pretty much erasing all of the prior day's gains on the government's move to rescue Fannie Mae and Freddie Mac .
By Kate Gibson