The news at a glance

Lehman Brothers: A loss clouds its future

Embattled investment bank Lehman Brothers posted its first-ever quarterly loss this week, reporting a $2.8 billion deficit and announcing plans to raise $6 billion in new capital, said David Ellis in CNNmoney.com. CEO Richard Fuld announced the “very disappointing” news several days ahead of schedule in a bid to quell rumors that the firm was going broke. The major factors behind the loss were defaults on home mortgages and on loans to private-equity firms. Merger activity has also dried up, “eliminating a key source of lucrative fees for investment banks.”

Lehman’s pre-emptive announcement failed to tamp down speculation that the firm can’t survive on its own, said Yalman Onaran in Bloomberg.com. But like other Wall Street investment banks, Lehman can now borrow directly from the Federal Reserve, so there’s no rational reason to believe the firm will run out of money. Still, as analyst Tom Jalics of Cleveland’s National City Bank said, “Market reactions these days aren’t based on rational analysis. It’s all about sentiment.” And the prevailing sentiment is that Lehman’s still in a heap of trouble.

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Antitrust: Intel in the cross hairs

Chip-making giant Intel announced last week that it is being investigated for allegedly cheating to gain an edge on AMD, its largest rival in microprocessors, said Don Clark and John R. Wilke in The Wall Street Journal. The Federal Trade Commission, along with overseas regulators, is investigating AMD’s charges that “Intel has contrived a series of ways to penalize computer makers that buy from AMD.” Intel insists that while it competes hard to sell microprocessors, the electronic brains of PCs, it is complying with U.S. law.

Autos: GM turns away from SUVs

With light-truck and SUV sales drying up, GM announced last week that it would close four North American truck-making plants and would try to sell its gas-guzzling Hummer product line, said Shawn Langlois in SmartMoney.com. In closing down plants that make “such fuel-thirsty trucks and SUVs as the Chevrolet Silverado and the Suburban,” GM is effectively acknowledging that the era of low fuel prices is over. “This is not a temporary shift,” said money manager David Kudla. “Two-dollar-a-gallon gas is gone forever.”

Alternative fuels: Toyota’s breakthrough

Japanese automaker Toyota announced last week that it has developed “a green car powered by hydrogen and electricity” with twice the range of earlier hybrids, said Yuri Kageyama in the Associated Press. The new hybrid, run by an electric motor and a hydrogen-powered fuel cell, has a maximum cruising range of 516 miles, compared with 205 for Toyota’s first-generation hybrid. The new car will be available in Japan later this year, but there’s no word on when a model will be unveiled in the U.S.

White-collar crime: Broadcom founder indicted

Broadcom founder and CEO Henry Nicholas was hit by two lurid indictments last week, said Thomas Claburn in Information Week. One indictment charges Nicholas with rigging stock-option awards so that he could reap millions of dollars in profits. The other alleges Nicholas trafficked in cocaine, methamphetamine, and Ecstasy; slipped Ecstasy into the drinks of unwitting customers; and “attempted to conceal his conduct with death threats and payments.” The indictments follow a guilty plea by a former top Broadcom executive on related counts. Nicholas denied the charges.