Lehman's Property Bets Are Coming Back to Bite; Dow's Modest Gain Masks Big Declines In Financial Stocks
The worries that drove the stock market to steep losses last week persisted, sending financial stocks sharply lower, though gains by a few large blue-chip companies contributed to a mixed finish for major indexes.</br></br>The Dow Jones Industrial Average rose 70.51 points to 12280.32, a modest comeback from the previous session's nearly 395-point drop. Among its components, Alcoa was the biggest riser, up 7.5% on speculation that it might be a takeover target. McDonald's rose 4.1% after reporting strong sales for May.</br></br>Developments at big financial firms overshadowed any good news. Lehman Brothers slid 8.7% after it projected a second-quarter net loss of about $2.8 billion and announced plans to raise $6 billion in new capital. The capital raising was anticipated, but the amount was above most expectations.</br></br>It was a reminder that credit concerns continue to stalk Wall Street giants and a deteriorating economic environment could compound pressures facing the nation's leading financial institutions. Dow component J.P. Morgan Chase fell 6.4%.</br></br>"There's probably another shoe to drop," said Dave Rovelli, head trader at Canaccord Adams. "It's impossible to quantify because nobody knows what these financials have in their books -- even these financials don't understand what they have."