3:10PM New York – U.S. stock market averages rebounded in the afternoon trading as crude oil edged lower and gold plunged 4.5%.

Stock market averages rebounded in the afternoon trading and S&P 500 index rose 1.4% or 16.4 to 1,240.95. Of the stocks in the index 356 declined, 142 rose and 2 were unchanged.

Massey Energy (MEE: chart) led the gainers in the index with a rise of $3.84 or 9.9% followed by gains in Micron Technology of 9.2%, in Consol Energy of 9% and in Peabody Energy of 8.6%. Washington Mutual led the declines in the index with a loss of 19% followed by declines in MGIC Investment Corp of 7.8%, in Fannie Mae of 5.6%, in Tesoro Corp of 5% and in Unisys and Sprint Nextel of 4.9%.

Lehman Brothers, once the largest mortgage securities dealer and underwriter reported its biggest quarterly loss ever. In the third quarter Lehman reported a loss of $3.9 billion after it wrote down assets of $5.6 billion after tax. The company also lowered annual dividend to 5 cents per share from 68 cents and save $450 million annually.

Lehman (LEH: chart) lowered its residential mortgage portfolio by 31% to $17.2 billion and it will further decline to $13.2 billion after it completes the sale of $4 billion of residential mortgage portfolio to BlackRock Financial Management, Inc. Commercial real estate exposure by 18% to $39.8 billion. The company plans spin off a portfolio of between $25 billion and $30 billion in the first quarter of 2009 as a separate company Real Estate Investments Global.

Jacobs Engineering (JEC: chart) rebounded 7% or $3.89 to $60.33 after it had dropped nearly 25% from its peak of $82.20 on July 30.

International Rectifier Corp (IRF: chart) rose $1.54 to $22.64 after Vishay Intertechnology (VSH: chart) raised its offer to $23 a share from $21.20 a share and take it directly to shareholders.

McClatchy Company (MNI: chart) dropped 3 cents to $3.332 after chairman and chief executive officer Gary Pruit resigned as a co-trustee of four family trusts that control 12.5 million shares of Class B stock that controls 80% of voting rights and 33% of the company. Pruit, is not a family member of McClatchy family was replaced by company’s longtime director Leroy Barnes Jr. McClatchy shares have declined 85% in the last one year of trading.

Las Vegas Sands Corp(LVS: chart) fell 8.7% or $3.58 to $37.79 after monthly casino revenue fell 14.7% in July. Gambling revenue of all casinos on the strip declined to $519 million from $608 million. MGM Mirage (MGM: chart) added 89 cents to $33.47 and Wynn Resorts declined $1.81 to $83.40.

Tesoro Corp (TSO: chart) dropped 5% or 87 cents to $16.39 after crude oil prices edged lower. Valero (VLO: chart) edged up 51 cents to $31.02.

Salesforce.com (CRM: chart) rose $4.70 to $56.78 and Fastenal Company (FAST: chart) added 60 cents after S&P added the companies to replace Fannie Mae and Freddie Mac.

Washington Mutual Inc (WM: chart) fell 61 cents to $2.69 after credit rating agency S&P cut its rating. The mortgage lender has declined 92% in the last one year and recently replaced its chief executive officer.