US stocks point higher after sell-off

[September 10, 2008]  NEW YORK (AP) -- U.S. stocks headed for a moderately higher open Wednesday a day after a sell-off and as investors awaited an announcement from Lehman Brothers Holdings Inc. about its plans to shore up its balance sheet.

Unease about the No. 4 U.S. securities firm touched off heavy selling Tuesday as investors worried that it has few options to raise capital. The already beaten down stock lost nearly half its value Tuesday as investors grew fearful that the company would succumb to soured mortgage debt and other financial difficulties.

Lehman said it will offer details about its performance during the fiscal third quarter ahead of the market opening Wednesday, a week ahead of when it had planned to release results.

Investors have been disappointed that Lehman's talks with state-run Korea Development Bank about a possible investment broke down, a development confirmed by KDB Wednesday.

Wall Street has held big worries about the financial sector since the near-collapse and subsequent sale of Bear Stearns Cos. in March. Banks such as Lehman have struggled in the past year with unwieldy amounts of mortgage-backed securities and other risky investments on their books.

Many Wall Street observers say the stock market will not be able to carve out a sustained advance until investors can determine the scale of losses in the financial sector. Already global banks have written off more than $300 billion in bad investments.

Dow Jones industrial average futures rose 61, or 0.54 percent, to 11,308. Standard & Poor's 500 index futures rose 6.80, or 0.55 percent, to 1,233.40, while Nasdaq 100 index futures rose 17.00, or 0.98 percent, to 1,745.75.

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

Bond prices fell Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.62 percent from 3.59 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose 13 cents to $103.39 a barrel in electronic trading on the New York Mercantile Exchange after OPEC said it would cut more than 500,000 barrels a day of production. On Tuesday, oil settled at the lowest level since April 1.

Overseas, Japan's Nikkei stock average fell 0.44 percent. In morning trading, Britain's FTSE 100 fell 0.89 percent, Germany's DAX index declined 0.68 percent, and France's CAC-40 fell 0.49 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com/

Nasdaq Stock Market: http://www.nasdaq.com/

[Associated Press; By TIM PARADIS]

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