BUSINESS BRIEFS
Mortgage losses temper boost in Lehman stock
Associated Press
NEW YORK — Lehman Brothers Holdings Inc. might have surprised investors yesterday with better-than-expected quarterly results, but the No. 4 U.S. investment bank left them mostly in the dark on the details of its losses from bad mortgage-related debt.
Whatever doubts they may have had, though, investors pushed the stock 10 percent higher after the Federal Reserve slashed interest rates to shore up the economy.
The third quarter revealed the tightening credit conditions that swept through global financial markets cost Lehman $700 million, which the company said was a total number after factoring in gains on moves it made to hedge risky positions. It made clear it had no immediate plans to disclose what its precise losses were.
Lehman, the first of four investment banks to post results this week, provided investors a crucial glimpse at how Wall Street fared in the fallout from the mortgage crisis.
Profit fell 3.2 percent to $887 million during the quarter, better than the near 11 percent decline that analysts had projected.
CRUDE PRICES HIT NEW HIGHS
NEW YORK — Oil futures rose to new records yesterday after the Federal Reserve cut interest rates by a larger than expected half percentage point, raising market hopes that economic growth will accelerate and lift demand even as crude oil and gasoline inventories are tight.
A barrel of crude surged to a new trading high of $81.90 on the New York Mercantile Exchange in the moments immediately after the Fed's decision. While light, sweet crude for October delivery settled at $81.51 a barrel, up 94 cents, prices continued to rise after the Nymex closed, hitting $82.38 in afternoon electronic trading.
Investors already had priced a quarter-point cut in the benchmark federal funds rate into the market, said Brad Samples, a commodities analyst at Summit Energy Services Inc. in Louisville, Ky. The half-point cut spurred even more buying.
BRITAIN VOWS TO BACK LENDER
LONDON — Prime Minister Gordon Brown insisted the British economy remained strong yesterday while worried depositors lined up for the third consecutive day to withdraw money from one of the nation's largest mortgage lenders.
Brown's first comments on the woes of Northern Rock PLC came amid a highly visible and orchestrated effort from government ministers to dissipate public panic.
The government on Monday vowed to back all savings held by the bank in an attempt to end a sustained run on the institution with roots dating back to 1850.
The central bank announced yesterday that it had pumped $8.8 billion into money markets, in the form of two-day securities repurchase agreements.
KIDS NO LONGER 1ST ON SOUTHWEST
Southwest Airlines has a new way of getting children on a plane — by no longer putting them first.
As of Oct. 2, the airline will end its long-standing policy of allowing people with young children to board ahead of most passengers, Southwest spokeswoman Beth Harbin said Tuesday.
Although the Dallas-based airline has been looking for ways to boost revenue, the push behind Southwest's policy change appears to have more in common with that age-old play-group complaint: No fair.
"We certainly have had customers express their concerns when they see 20 or so people pre-boarding," Harbin said. "This levels the playing field."
Throughout its 36-year history, Southwest has built an image of the populist airline with all-coach cabins and no reserved seats.
Disabled passengers still will be allowed to pre-board, followed by Southwest's traditional three groups of boarders: A, B and C.
