NEW YORK - US STOCKS opened lower on Friday as the market retrenched on fears about the fate of two troubled financial firms, Lehman Brothers and Washington Mutual.

In early exchanges, the Dow Jones Industrial Average fell 87.36 points (0.76 percent) to 11,346.35 and the tech-heavy Nasdaq shed 18.13 points (0.80 percent) to 2,240.09.

The broad-market Standard & Poor's 500 index lost 8.98 points (0.72 per cent) to 1,240.07.

Market angst remained high amid reports that the US government was trying to find a buyer for Lehman Brothers, the ailing Wall Street firm whose shares have slid 90 per cent this year amid fears of its survival.

Washington Mutual, a major West Coast bank, was also in focus after Moody's Investors Service downgraded its debt.

'Gloom is very thick,' said Mr Al Goldman at Wachovia Securities.

'Today - the potential big news one way or the other would be Lehman - to be or not to be.'

Mr Patrick O'Hare at Briefing.com said the Wall Street atmosphere has been 'more like a soap opera than a bastion of wealth creation'.

'Depending on the hour, the market and financial sector was either pessimistic about the fate of Lehman Brother and Washington Mutual or optimistic.' -- AFP