Lehman Brothers

NEW YORK -- U.S. stocks were mixed yesterday. The Dow Jones industrial average recovered almost all of a 118-point plunge as banking and computer shares rallied, while concern that profit won't justify big gains depressed most shares.Many traders were expecting a large decline yesterday after Abby Joseph, strategist for Cohen Goldman, Sachs & Co., and Federal Reserve Vice Chairman Alice M. Rivlin warned that stocks may have risen too far, too fast, and Brazil's budget crisis is worsening.

NEW YORK -- U.S. stocks were mixed yesterday. The Dow Jones industrial average recovered almost all of a 118-point plunge as banking and computer shares rallied, while concern that profit won't justify big gains depressed most shares.Many traders were expecting a large decline yesterday after Abby Joseph, strategist for Cohen Goldman, Sachs & Co., and Federal Reserve Vice Chairman Alice M. Rivlin warned that stocks may have risen too far, too fast, and Brazil's budget crisis is worsening.

U.S. stocks rose yesterday, led by computer-related shares such as Dell Computer Corp. and America Online Inc. amid optimism for surging profits."The market's telling you that technology is the place to be because that's where the earnings growth is," said Charles Henderson, chief investment officer at Chicago Trust Co., which manages $10 billion.The Nasdaq composite index, packed with computer and Internet stocks, snapped back from early losses to jump 54.21, or 2.8 percent, to 2,003.75, its biggest rise since Oct. 15.The Dow Jones industrial average climbed 16.99, or 0.2 percent, to 9,133.

MOSCOW -- Lehman Brothers Holdings Inc. won a court order yesterday blocking the British bank accounts of Inkombank and Unexim Bank, two of Russia's biggest banks, claiming they had defaulted on obligations of almost $113 million.Lehman claimed in documents filed in the High Court in London that Inkombank defaulted on an $87 million payment due Sept. 11 and Unexim Bank defaulted on a $25.9 million payment the same day.Lehman is among dozens of foreign private creditors, including Credit Suisse First Boston and Deutsche Bank AG, trying to salvage anything they can from investments that collapsed after the government defaulted on $40 billion of its debts in August.

NEW YORK -- U.S. stocks were mixed yesterday on concern that share prices already reflect the benefits of the Federal Reserve interest-rate cut that is expected today.The Dow Jones industrial average rose 80.07, to 8,108.84. The Standard & Poor's 500 index gained 3.94, to 1,048.69. The Nasdaq composite index dropped 4.37, to 1,739.22, retreating from a 25.98-point advance.Among other broad indexes, the Russell 2,000 index of small-capitalization stocks lost 1.01, to 368.01; the Wilshire 5,000 index gained 27.96, to 9,603.

Lockheed Martin Corp. will spin off 10 business units with 4,900 employees as part of a corporate restructuring, the company said yesterday.The business units, which had combined revenues last year of $650 million, will create a new company called L3 Communications, based in New York City.Lockheed Martin's Bethesda headquarters declined to release financial details of the transaction, which it said would be subject to a definitive purchase agreement and regulatory approvals.The deal should close by the end of the first quarter, the company said.

Oncor Inc., which markets genetic tests for cancer and other diseases, said yesterday that it has retained Lehman Brothers, the New York investment banking house, to explore "strategic alternatives, especially landing a well-heeled corporate partner."Our real objective in hiring Lehman is to find a corporate partner to help us with our capital requirements. We want to fuel the fire so we can go forward," said Stephen Turner, chairman of Oncor.Turner said the Gaithersburg company selected Lehman Brothers because of its expertise in health care and its recent track record packaging "creative" marriages between cash-rich pharmaceutical houses and technology-rich companies.

WASHINGTON -- Baltimore Gas & Electric Co. filed with the Securities and Exchange Commission Friday to sell up to $200 million in debt securities.The company plans to sell medium-term notes that mature in nine months to 30 years, the SEC filing said.The company will use the proceeds from the offering for general corporate purposes, including the repayment of commercial paper, financing of construction, capital expenditures and for operations, the S-3 shelf registration statement said. A shelf registration allows a company to register securities and sell them from time to time when financing needs arise.

NEW YORK -- Elaine Garzarelli, a former Lehman Brothers strategist best known for calling the 1987 stock market crash, told clients yesterday that she expects further declines in the value of U.S. stocks.Stock prices may fall 15 percent to 25 percent from their peaks in May and June, Garzarelli said, according to one money manager who was on a conference call she held with the clients.Since May, the Standard & Poor's 500 Index has fallen about 9 percent and the Dow Jones industrial average by about 6.7 percent.

Lower prices hurt Bethlehem Steel Corp. last quarter, but the industrial giant's chairman says demand is solid, especially in the company's 5,000-worker Sparrows Point mill in Baltimore County, and that profit margins are expected to improve."

Maybe we'll get financial reform this year after all. Obama administration officials are invading Capitol Hill to get Congress off its behind. Treasury Secretary Timothy F. Geithner met with House Majority Leader Steny H. Hoyer and other Democrats. Hoyer says he'll put a reform bill on the House floor next month. Senate Banking Committee Chairman Christopher J. Dodd is moving more slowly, but he told reporters last week that the committee could vote on a bill within a few weeks. It's important stuff.

I get press releases about new books all the time. This one arrived the other day: "A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers ... a fly-on-the-wall, insider look at the mad house that Lehman became. It will reveal never-before-told stories about the dark characters who ruled Lehman, refusing to heed warnings that the company was headed for an iceberg." The author is Lawrence G. McDonald, until its collapse "one of Lehman's most consistently profitable traders" and an "eyewitness" to the brewing mess inside the investment bank.

WASHINGTON - The chief executive of Lehman Brothers Holding Inc., whose bankruptcy filing last month drastically escalated the Wall Street financial crisis, faced angry lawmakers yesterday and defended his leadership and the millions of dollars he and other executives made as the company's troubles mounted. Although taking what he called "full responsibility" for the actions that led to the nation's largest bankruptcy ever, Richard S. Fuld Jr. told the House Oversight and Government Reform Committee that his company was overwhelmed by a "financial tsunami" caused by a series of "destabilizing factors," including lack of investor confidence, short-selling, credit downgrades and rumors.

Fannie Mae and Freddie Mac, AIG, Lehman Brothers - and now, closer to home, Constellation Energy. Once again, Baltimore slumps into a chair and sings the blues: "Only one Fortune 500 company left in town." "We're a branch office community." "All that money went north, south and west." It's easy to see why Chicken Little might be a better candidate for local mascot than the Ravens' Edgar, Allan and Poe. But fear not. Baltimore and many other midsize cities now get all of their economic growth from small business and new ventures.

A few weeks ago, when our government nationalized Fannie Mae, which Forbes magazine last year ranked as the 57th-largest firm in the world, and Freddie Mac (No. 104), one lesson allegedly learned was that it was bad policy to allow companies to become "too big to fail," requiring the government to step in to curtail the damage. Analysts then said reforms should include changes that would preclude allowing firms to become big and powerful. That was then. This week, there were sighs of relief - if not cheers - when Bank of America (No. 2)

Reflecting how the financial sector's meltdown has reverberated beyond Wall Street, investors wiped out about 70 percent of the value of Constellation Energy Group's stock at one point yesterday, despite little information about how or whether the Baltimore energy company's trading operations are affected by the demise of Lehman Brothers and other firms. Constellation shares lost nearly 36 percent, or $17.23, to close yesterday at $30.76 on the New York Stock Exchange. The closing price was the lowest since May 2003, according to Bloomberg News, but it could have been much worse: At one point, the stock fell to $13 before recovering in the final hour of trading.

Wall Street responded to the forced bankruptcy of a 158-year-old investment leader and the self-initiated sale of a household name in the brokerage business with predictable pessimism - the Dow plunged big-time yesterday. But it's not as though the fates of Lehman Brothers and Merrill Lynch came as a surprise. Rather, their predicaments reinforced the latest fallout of the ongoing U.S. financial crisis: More institutions are likely to falter, and they can't all expect the federal government to come to their rescue.

Constellation Energy Group worked to reassure Wall Street yesterday that its wholesale energy and credit relationships with Lehman Brothers will not have a "material adverse effect" on the Baltimore company, which saw its shares lose 18 percent amid a broader market sell-off. Constellation's stock closed down $10.38 to $47.99 on the New York Stock Exchange. Even though Constellation conducts energy deals with Lehman, the New York investment banking company that entered bankruptcy proceedings yesterday does not owe it a substantial amount of money, according to a document filed with the Securities and Exchange Commission after financial markets closed yesterday.

Wall Street's meltdown sent the stock market reeling and left Main Street with one sobering thought: It isn't over yet. The record bankruptcy filing of Lehman Brothers yesterday and fire sale of Merrill Lynch to Bank of America raised the specter of further blowouts threatening the stability of an already-battered financial system in the months ahead. Unlike a stock market crash that hits all at once, the "agonizing and deep-seated" drumbeat of trouble seems certain to drag on, said market veteran Phil Hummer of Chicago's Wayne Hummer Investments.

NEW YORK - Fear and greed are the stuff that Wall Street is made of. But inside the great banking houses, those high temples of capitalism, fear came to the fore this weekend. As Lehman Brothers, one of oldest names on Wall Street, appeared to unravel yesterday, anxiety over the bank's fate - and over what might happen next - gripped the nation's financial industry. By late afternoon, Merrill Lynch, under mounting pressure, entered into talks to sell itself to Bank of America. Dinner parties were canceled.