The markets opened higher after Lehman Brothers offered an early update of its quarterly losses and efforts to sell off assets. The Dow rose more than 50 points to 12,888 while Nasdaq surged 21 points to 2231.

On the upside

Lehman Brothers (NYSE: LEH) pre-announced a $3.9 billion loss for the quarter and stated that it was close to a deal to sell off a majority stake in its investment management business. The stock edged higher in early trading after tumbling 40% yesterday.

Biotechnology company ImClone Systems (Nasdaq: IMCL) announced that it has a received a $70 a share offer from a large pharmaceuticals company which topped the $60 a share offer from Bristol-Myers Squibb (NYSE: BMY).

Shares of Massey Energy (NYSE: MEE) rebounded after an analyst's downgrade triggered a sell-off yesterday.

On the downside

S&P downgraded the outlook for Washington Mutual (NYSE: WM) to negative which sent its shares tumbling to new multi-year lows. A lower rating causes the bank's borrowing costs to increase.

Shares of Brokerage GFI Group (Nasdaq:GFIG) fell after it ended talks to merge with Tullett Prebon, a provider of real-time commodity pricing.

Tyson Foods (NYSE: TSN) planned to offer 20 million shares at $12.75 apiece. Investors worried that the convertible senior notes would dilute the stock which traded lower.

In the broad market, advancing issues outpaced decliners by a margin of nearly 2 to 1 on the NYSE and by more than 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks rose 5 points to 712.