US STOCKS-Wall St gains as energy, tech offset bank fears
(Updates to close)
By Steven C. Johnson
NEW YORK, Sept 10 (Reuters) - U.S. stocks rose on Wednesday as OPEC's move to shore up oil prices boosted energy shares and Texas Instruments' outlook soothed fear about technology spending even as worries persisted about the health of the banking sector.
The broader market's gains came a day after the S&P 500 posted its biggest decline in a year and a half.
Energy shares rose as OPEC said it would cut production, which was seen as an attempt to halt a recent sharp slide in the price of oil CLc1. Exxon Mobil (XOM.N) rose nearly 3 percent and was the top boost for the S&P.
Technology shares also rose on relief that chip maker Texas Instruments (TXN.N) did not cut its earnings outlook after a spate of recent warnings on consumers' cell phone spending.
Financial shares, however, were broadly lower after Lehman Brothers LEH.N posted an unexpectedly large quarterly loss on huge mortgage-related write-downs and failed to announce any firm deals to raise desperately needed capital. Shares of Lehman, the No. 4 U.S. investment bank, sank 6.9 percent, extending Tuesday's 45 percent slide.
Meanwhile, shares of Washington Mutual (WM.N) sank to a 17-year low on fears that the savings and loan, which is under special regulatory supervision, won't find a buyer or raise enough capital to offset soaring mortgage losses. Shares closed down nearly 30 percent at $2.32 and were second biggest loser on the New York Stock Exchange [ID:nN10435253].
"The market still has an acute case of the financial jitters but investors have concluded that we're not going off the edge of Niagara Falls," said Fred Dickson, market strategist and director of retail at D.A. Davidson & Co in Lake Oswego, Oregon.
The Dow Jones industrial average .DJI was up 38.19 points, or 0.34 percent, at 11,268.92. The Standard & Poor's 500 Index .SPX was up 7.53 points, or 0.61 percent, at 1,232.04. The Nasdaq Composite Index .IXIC was up 18.89 points, or 0.85 percent, at 2,228.70.
Texas Instruments shares rose 0.6 percent to $21.85. The Philadelphia Stock Exchange index of semiconductors .SOXX was up 0.8 percent.
Tech bellwether International Business Machines (IBM.N) climbed 2.6 percent to $118.04 and led gains on the Dow.
Investors also snapped up energy shares on the view that they now look more attractive after having fallen sharply in recent months. Shares of Conoco Phillips (COP.N) rose 5.2 percent to $71.87. Exxon Mobil added 2.7 percent to $75.25.
"My gut is there are good values there, even with the price of oil around $100 a barrel," said Bobby Harrington, head of block trading at UBS in Stamford, Connecticut.
After hitting a record high above $147 a barrel in July, crude has come down quickly, last trading below $103. OPEC's move to cut supplies was seen as an attempt to prevent prices from sliding much further.
Among financials, Lehman shares closed down at $7.25, after falling earlier to an almost 10-year low of $6.93.
Lehman said it would sell a majority stake in its investment management division, spin off commercial real estate assets, and slash its annual dividend. For details, see [ID:nLA171292].
But Moody's Investors Service said on Wednesday it was placing the bank's credit rating on review. with the direction of the rating uncertain.
Shares of Wachovia Corp WB.N were down 2.5 percent at $15.84 while Merrill Lynch MER.N fell 3.8 percent to $23.81. American International Group (AIG.N), the world's biggest insurer, which also has substantial exposure to the mortgage market, lost 4.7 percent to end at $17.50.
The S&P financial index ended down 0.7 percent.
About 1.55 billion shares changed hands on the New York Stock Exchange on Wednesday, below last year's estimated daily average of roughly 1.90 billion. On Nasdaq, about 2.27 billion shares traded, above last year's daily average of 2.17 billion.
Advancing stocks outnumbered declining ones by about 1.2 to 1 while on the Nasdaq, advancers beat decliners by about 1.3 to 1. (Additional reporting by Richard Leong and Al Yoon; Editing by Leslie Adler)
