Stocks end mixed after a day of trading lower

Market update

Overseas markets

Investors also seemed unimpressed by a larger-than-expected decrease in weekly unemployment claims from newly laid-off workers. The Labor Department said claims fell by 13,000 to 432,000 last week. But the four-week moving average rose to 445,750, a nearly seven-year high.

A shaky job market has been slamming consumers who also face a tighter credit climate, rising costs and falling home prices. That is troubling to investors as consumer spending accounts for more than two-thirds of U.S. economic activity.

“All three reports tend to indicate that we’re bottoming out but that there is no real end in sight and that’s what I think the market has to get used to,” said Doug Roberts, chief investment strategist at Channel Capital Research.

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The fluctuations of oil and financials again dictated the mood on Wall Street Thursday. A slew of analysts have been downgrading banks and brokerages over the past few weeks, and late Wednesday, a Citigroup analyst lowered his third-quarter estimates for Lehman Brothers, Goldman Sachs Group Inc. and Morgan Stanley. He predicted Lehman will write down its assets by $2.9 billion, that Goldman will write down $1.8 billion and that Morgan will write down $1.7 billion.

News moving the markets
Oil ends trading over $121 amid Russia tension
Claims for jobless aid dip in latest week
Fannie, Freddie shares lose 25 percent of value
Pressure on Lehman to take action is growing

But the Ladenburg Thalmann analyst’s note helped the sector, by arguing that Lehman Brothers’ management values the company at a premium and would be willing to sell at the right price.

Lehman ended down 1 cent at $13.72, while Goldman Sachs fell $1.83 to $156.42 and Morgan Stanley fell 34 cents to $37.06.

The shifting sentiment came a day after fresh worries emerged about the possibility of a government bailout of government-chartered mortgage companies Fannie Mae and Freddie Mac. Such a move could wipe out shareholder equity.

Fannie and Freddie ended mixed after falling more than 20 percent Wednesday. Fannie rose 45 cents, or 10 percent, to $4.85, while Freddie fell 9 cents, or 2.7 percent, to $3.16.