Shares of Lehman Brothers Holdings Inc. climbed 2.2% at the open but closed up just 0.1% after the company reported fiscal third-quarter net income of $879 million, 74% more than a year earlier.
Earnings per share of $2.94 were up $1.23.
Susan Roth Katzke of Credit Suisse First Boston reiterated her "outperform" rating and wrote that Lehman's results exceeded her optimistic forecast and set "a high hurdle for the peer group."
Shares of other investment banks opened higher but slid late in the day. Goldman Sachs Inc. closed down 1.1%, and Morgan Stanley 0.2%. JPMorgan Chase & Co. gained 0.3%; Bear Stearns & Co., up 2.7% in early trading, lost ground and ended up 1.1%.
E-Trade Financial Corp. fell 4.3%; the New York online brokerage reported August trading activity 37% higher than a year earlier but down 3.7% from July.
The American Banker index of 225 banking stocks fell 1.1%, and the Standard & Poor's 500 fell 0.33%.
Among Wednesday's gainers were Freddie Mac, up 2.4%; Federal Agricultural Mortgage Corp., up 2.2% (after a 3.2% rise Tuesday); and Century Bancorp Inc. of Medford, Mass., up 2.1%.
The big decliners included ABC Bancorp of Moultrie, Ga., off 5%; TriCo Bancshares of Chico, Calif., off 4.5%; and Corus Bankshares Inc. of Chicago, off 3.9%.
