Lehman Bros. Rumored To Raise More Cash, Stock Lower

New York, NY (AHN) - Shares of Lehman Brothers (LEH) are near yearly lows amid speculation the company will need to raise more cash.

Rumors circulated on Tuesday that Lehman is accessing the Fed's discount window according to TradeTheNews.com. The company denied using the window and second quarter liquidity appears stronger than it was in the first.

Lehman says it has not accessed a Federal Reserve funding facility since April 16 according to a CNBC report, citing the bank's treasurer.

The other major brokers came down on the Lehman news as well. Shares of Merrill Lynch (MER) and Morgan Stanley (MS) are both lower on Tuesday. The Financial Select Sector SPDR (XLF), which tracks the large financial institutions, is trading lower by more than 1 percent, currently priced at $24.25.

Liquidity rumors preceded the Bear Stearns crisis and with uncertainty in the air investors took a flight to safety as bonds were up on Tuesday as Treasury yields dropped. As bond prices are bid up the yield (earned interest) comes down.