The New Zealand sharemarket eased down in early trade, as furious speculation surrounded the future of troubled giant United States investment bank Lehman Brothers.
As trading started in this country, the outlook for Lehman Brothers' future seemed dim after Barclays withdrew its bid to buy the beleaguered investment
bank and government officials and Wall Street bankers remained at an impasse about a rescue plan.
Moreover, there was also an emergency trading session being held at the International Swaps and Derivatives Association to "reduce risk associated with a potential Lehman Brothers Holdings bankruptcy".
Failure to find a solution could prompt skittish investors to unload shares of financial companies, a contagion that might affect stock markets around the world when they reopen.
Around 10.20am the benchmark NZSX-50 index was down 1.25 points to 3360.44, having earlier been up a few points. On Friday the index gained 28.1 points.
The Warehouse was up 5c early to 333, on top of a 7c gain on Friday as some investors grew more hopeful the chances might improve for a takeover bid as the company announced it was reviewing its Extra format.
Sky TV was up 7c to 465 on small turnover, and Pike River Coal up 5c to 179.
Top stock Telecom was down 2c to 295, Sanford was down 7c to 585, Fletcher Building lost 15c to 750, and Contact Energy was down 6c to 895.
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In the US stocks closed little changed on Friday (local time) in a day of whipsaw moves as uncertainty over the fate of Lehman Brothers kept investors anxious about the health of the US financial system.
The Dow Jones industrial average was down 0.10 per cent at 11,421.99. The Standard & Poor's 500 Index was up 0.21 per cent at 1251.72. The Nasdaq Composite Index was up 0.14 per cent at 2261.27.
For the week, the Dow finished 1.8 per cent higher while the S&P added 0.8 per cent and the Nasdaq edged up 0.2 per cent.
- NZPA
