Stocks struggled Wednesday morning as investors eyed falling oil
prices, an upwardly revised reading on productivity and talk of more
problems for Lehman Brothers.
Lehman Brothers slides anew. Shares of the bank fell for a second
session on reports that the company could be forced to sell some or all
of itself to another bank due to ongoing balance sheet woes.
United Airlines announces cuts. The unit of UAL Corp.
said it will reduce its fleet by 100 planes and cut as much as 1,600
jobs amid losses related to higher fuel costs.
Intel Corp., the biggest semiconductor company, Hewlett- Packard Co., the largest maker of personal computers, and EBay Inc.,
the biggest online auction site, advanced as the Institute for Supply
Management's service index expanded more than projected. American
Express, the biggest U.S. credit-card lender, rallied the most in a
month after predicting profit that topped forecasts. Bank of America
Corp. dropped to the lowest since 2002, limiting the market's advance,
after Merrill Lynch & Co. reduced earnings forecasts through 2010.
Ambac Financial Group Inc. tumbled the most since
April 23, losing 12 percent to $2.65. The second-biggest bond insurer
will be replaced by Lorillard Inc. in the Standard & Poor's 500
Index after the close of trading June 10.
Guess? Inc. gained 14 percent, the biggest jump
since November, to $43.20. The clothing maker reported first- quarter
profit that exceeded analysts' estimates and forecast full-year
earnings may rise more than it previously predicted.
Hovnanian Enterprises Inc. fell 6.7 percent, the most
since May 8, to $7.78. New Jersey's biggest homebuilder reported its
seventh consecutive quarterly loss as the value of its land continued
to decline.