Stocks mixed on financial sector worries; post gains for the week

NEW YORK -- Stocks finished another volatile session narrowly mixed Friday, as gains in the energy, utilities and materials sectors offset some of Wall Street's angst over the fate of Lehman Brothers Holders.

The three major indexes all managed to end the week higher.

The troubles of the financial sector dominated trading, as investors tried to glean insights into Lehman's race to sell itself or otherwise regain Wall Street's confidence. The company's shares have spiraled lower this week, heaping pressure on executives at the No. 4 U.S. investment bank to line up a buyer or source of fresh cash.

Lehman shares — which tumbled 42% Thursday and are down more than 94% for the year — fell another 57 cents, or 13.5%, to $3.65 on Friday.

The market is anticipating that Lehman will arrive at a deal over the weekend, said Ryan Larson, senior equity trader at Voyageur Asset Management. Lehman, the government and other banks have been declining to comment officially on the issue, but bankers and industry executives have been saying that Lehman is working feverishing to find a buyer.

Closure on the issue would be better than none, but it won't likely be an antidote for the turbulent market, Larson said.

"Once this deal gets done," Larson said, "you'll see sentiment shift to: Who's next?"

An unexpected slowdown at cash registers last month also weighed on the stock market Friday, particularly on shares of retailers and other consumer discretionary stocks. The Commerce Department said retail sales fell by 0.3% in August.

The Dow Jones industrial average fell 11.72, or 0.10%, to 11,421.99, after falling more than 150 points in the early going.

Broader stock indicators also came well off their lows. The Standard & Poor's 500 index rose 2.65, or 0.21%, to 1,251.70, and the Nasdaq composite index rose 3.05, or 0.14%, 2,261.27.

The Dow finished the week up 1.79%; the S&P finished up 0.76%; and the Nasdaq ended up 0.24%.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.73% from 3.64% late Thursday. The dollar was mixed against other major currencies, while gold prices rose.