It is the Wall Street equivalent of a coroner’s report — a 2,200-page document that lays out, in new and startling detail, how Lehman Brothers used accounting sleight of hand to conceal the bad investments that led to its undoing.

The report, compiled by an examiner for the bank, now bankrupt, hit Wall Street with a thud late Thursday. The 158-year-old company, it concluded, died from multiple causes. Among them were bad mortgage holdings and, less directly, demands by rivals like JPMorgan Chase and Citigroup, that the foundering bank post collateral against loans it desperately needed.

But the examiner, Anton R. Valukas, also for the first time, laid out what the report characterized as “materially misleading” accounting gimmicks that Lehman used to mask the perilous state of its finances. The bank’s bankruptcy, the largest in American history, shook the financial world. Fears that other banks might topple in a cascade of failures eventually led Washington to arrange a sweeping rescue for the nation’s financial system.

According to the report, Lehman used what amounted to financial engineering to temporarily shuffle $50 billion of troubled assets off its books in the months before its collapse in September 2008 to conceal its dependence on leverage, or borrowed money. Senior Lehman executives, as well as the bank’s accountants at Ernst & Young, were aware of the moves, according to Mr. Valukas, the chairman of the law firm Jenner & Block and a former federal prosecutor, who filed the report in connection with Lehman’s bankruptcy case.

Richard S. Fuld Jr., Lehman’s former chief executive, certified the misleading accounts, the report said.

“Unbeknownst to the investing public, rating agencies, government regulators, and Lehman’s board of directors, Lehman reverse engineered the firm’s net leverage ratio for public consumption,” Mr. Valukas wrote.

Mr. Fuld was “at least grossly negligent,” the report states, adding that Henry M. Paulson Jr., who was then the Treasury secretary, warned Mr. Fuld that Lehman might fail unless it stabilized its finances or found a buyer.

Lehman executives engaged in what the report characterized as “actionable balance sheet manipulation,” and “nonculpable errors of business judgment.”

The report draws no conclusions as to whether Lehman executives violated securities laws. But it does suggest that enough evidence exists for potential civil claims. Lehman executives are already defendants in civil suits, but have not been charged with any criminal wrongdoing.

A large portion of the nine-volume report centers on the accounting maneuvers, known inside Lehman as “Repo 105.”

First used in 2001, long before the crisis struck, Repo 105 involved transactions that secretly moved billions of dollars off Lehman’s books at a time when the bank was under heavy scrutiny.

According to Mr. Valukas, Mr. Fuld ordered Lehman executives to reduce the bank’s debt levels, and senior officials sought repeatedly to apply Repo 105 to dress up the firm’s results. Other executives named in the examiner’s report in connection with the use of the accounting tool include three former Lehman chief financial officers: Christopher O’Meara, Erin Callan and Ian Lowitt.

Patricia Hynes, a lawyer for Mr. Fuld, said in an e-mailed statement that Mr. Fuld “did not know what those transactions were — he didn’t structure or negotiate them, nor was he aware of their accounting treatment.”

Charles Perkins, a spokesman for Ernst & Young, said in an e-mailed statement: “Our last audit of the company was for the fiscal year ending Nov. 30, 2007. Our opinion indicated that Lehman’s financial statements for that year were fairly presented in accordance with Generally Accepted Accounting Principles (GAAP), and we remain of that view payday loans for self employed.”

Bryan Marsal, Lehman’s current chief executive, who is unwinding the firm, said in a statement that he was evaluating the report to assess how it might help in efforts to advance creditor interests.

Repos, short for repurchase agreements, are a standard practice on Wall Street, representing short-term loans that provide sometimes crucial financing. In them, firms essentially lend assets to other firms in exchange for money for short periods of time, sometimes overnight.

But Lehman used aggressive accounting in its Repo 105 transactions: it appears to have structured transactions such that they sold securities at the end of the quarter, but planned to buy them back again days later. These assets were mostly illiquid real estate holdings, meaning that they were hard to sell in normal transactions.

The effect of the accounting was to artificially and temporarily lower the firm’s debt levels to hit certain targets, making the firm look healthier than it really was.

In a series of e-mail messages cited by the examiner, one Lehman executive writes of Repo 105: “It’s basically window-dressing.” Another responds: “I see … so it’s legally do-able but doesn’t look good when we actually do it? Does the rest of the street do it? Also is that why we have so much BS [balance sheet] to Rates Europe?” The first executive replies: “Yes, No and yes. :)”

Mr. Valukas was appointed by the United States Trustee in the case in January 2009 to investigate the causes of the Lehman bankruptcy, as well as to find out if any fraud or misconduct took place.

Mr. Valukas writes in the report that “colorable claims” could be made against some former Lehman executives and Ernst & Young, meaning that enough evidence existed that could lead to the awarding of damages in a trial. He added that Lehman’s directors were not aware of the accounting engineering.

By his reckoning, Lehman managed to “shed” about $39 billion from its balance sheet at the end of the fourth quarter of 2007, $49 billion in the first quarter of 2008 and $50 billion in the second quarter. At that time, Lehman sought to reassure the public that its finances were fine — despite pressure from short-sellers like the hedge fund manager David Einhorn.

Executives, including Herbert McDade, who was known internally as the firm’s “balance sheet czar,” seemed aware that repeatedly using Repo 105 was disguising the true health of the investment bank. “I am very aware … it is another drug we r on,” he wrote in an April 2008 e-mail cited by the examiner’s report. At other times, he is described as calling for a limit to the number of Repo 105 transactions.

By May and June of 2008, a Lehman senior vice president, Matthew Lee, wrote to senior management and the firm’s auditors at Ernst & Young flagging “accounting improprieties.” Neither Lehman executives nor Ernst & Young alerted the firm’s board about Mr. Lee’s allegations, according to the report.

Mr. Fuld is described in the examiner’s report as denying having knowledge of the Repo 105 transactions, and there is no evidence that he directed subordinates to make use of that aggressive accounting. (He did recall issuing several directives to reduce the firm’s debt levels.) But Mr. McDade is reported as telling Mr. Fuld about using Repo 105 to achieve that goal.

Lehman Brothers Hid Borrowing, Examiner Says

LONDON – European stock markets won some respite Monday ahead of a meeting of eurozone finance ministers in Brussels, where the Greek debt crisis will likely top the agenda. However, public holidays in many Asian countries as well as the U.S. have reined in some of the volatility that gripped markets over the last couple of weeks.

The FTSE 100 index of leading British shares was up 34.48 points, or 0.7 percent, at 5,176.93 while Germany’s DAX rose 34.26 points, or 0.6 percent, at 5,534.65. The CAC-40 in France was 26.54 points, or 0.7 percent, higher at 3,625.61.

The main point of interest for Europe’s markets will continue to be the debt problems afflicting Greece, as finance ministers from the 16 euro countries gather in the wake of last Thursday’s meeting of EU leaders. On Tuesday, the finance ministers of the full 27-nation European Union meet.

Though EU leaders gave Greece some vocal support, no money or guarantee was offered, primarily because Germany was not willing to stump up any cash as it could undermine German bonds and put further pressure on the euro.

Instead, all agreed that Greece’s progress in bringing down its budget deficit will be closely monitored and it would not be allowed to threaten the eurozone. Markets interpreted the latter comment as an implicit guarantee that eurozone policymakers will help the country if its own efforts fail.

An ensuing narrowing in spreads between German and Greek bonds — a sign that the markets think a Greek default is becoming less likely — and a more steady tone to the euro have diminished expectations that anything substantially new will emerge later.

“Risk aversion remains in vogue, though the resilience of equity markets suggests we are seeing nervousness more than outright fear and I sense the dollar’s rally may therefore be losing momentum,” said Kit Juckes, chief economist at ECU Group.

By mid afternoon London time, the euro was unchanged at $1.3610. Last week, at the height of the Greek fiscal concerns, the euro had slid to a nine-month low of $1.3533.

Besides Greece, investors have fretted about the public finances in Spain, Portugal and Ireland easy fast payday loans.

Dubai is also a growing concern amid fears that the highly indebted emirate may repay creditors less than the amounts due — it was November’s debt postponement from Dubai World, a government investment company with around $59 billion in debts, that stoked the markets’ concerns about overborrowed countries.

Dubai’s stock market fell sharply while the cost of insuring against the emirate’s debts edged back up.

“The theme of sovereign debt risk is likely to remain on investors’ agenda as fresh rumblings in Dubai make clear,” said Neil Mackinnon, global macro strategist at VTB Capital.

Earlier, much of Asia was closed for the Lunar New Year holiday, including Hong Kong, Shanghai, Singapore and Seoul.

However, Japanese and Australian markets fell as investors reacted to China’s move late Friday to curtail bank lending to cool off strong growth there.

Better-than-expected Japanese fourth quarter economic growth figures failed to lift Tokyo’s benchmark Nikkei 225 index, which slid 78.89 points, or 0.8 percent, to close at 10,013.30. Analysts said that the monetary tightening in China — the second such move in a month — and uncertainty about the economic outlook in coming quarters weighed on sentiment.

Japan’s gross domestic product grew at an annual pace of 4.6 percent in the October-December period, keeping Japan just ahead of China as the world’s No. 2 economy. Japan’s nominal GDP for the 2009 calendar year came to about $5.1 trillion, ahead of China’s $4.9 trillion.

Australia’s benchmark S&P/ASX200 fell 16.6 points, or 0.4 percent, to 4,545.5.

Wall Street is closed for the Presidents Day holiday.

Elsewhere, oil prices were flat, with benchmark crude for March delivery down 1 cent to $74.12 a barrel.

____

Associated Press Writer Malcolm Foster in Tokyo contributed to this report.

European markets edge up despite Greek debt fears

BRUSSELS – European Union leaders on Thursday offered Greece moral support but no money to help it weather a debt crisis — vague assurances that didn’t calm the market fear that has shaken the entire EU and undermined the shared euro currency.

The 16 countries that use the euro said only that they “will take determined and coordinated action, if needed, to safeguard financial stability in the euro as a whole.”

But no money or loan guarantees were put on the table in the statement from a summit meeting in Brussels.

Markets appeared disappointed at not seeing a concrete backstop to ward off a potential default by Greece, which needs to borrow euro54 billion this year to cover its outsized budget deficit.

The Greek crisis is the leading edge of the debt troubles that have hit governments in the developed world during the world’s three years of economic turbulence, as they run up deficits bailing out banks and stimulating their economies.

A default would be a serious blow to Europe’s monetary union, and fears that Athens might not be able to pay its debts have already led markets demanding higher borrowing costs for Greece.

There are also concerns that the contagion could spread to other financially wobbly countries, such as Portugal and Spain, and that other governments will have to pay more to borrow.

The leaders said Greece had not requested financial support and called on Athens to push through “in a rigorous and determined manner” its budget cuts that have already triggered protests and strikes — and to prepare bigger cuts if needed.

Neil Mackinnon, global macro strategist at VTB Capital said, “it just looks like a pledge of solidarity, but no actual details of a program which is why the euro is still in the doldrums.”

“They have to stop this right now…they are firefighting at the moment but they need to put out this fire right now,” said Neil Mellor, currency strategist at Bank of New York Mellon. “It won’t appease those looking for a bona fide rescue plan.”

The euro hit a new nine-month low of $1.3635, having been as high as $1.38 earlier in the day on hopes of more substantive Greek bailout news. It was $1.51 in December. German and French stocks were down, while shares in Britain, which doesn’t use the euro, rose.

Markets see Greece at risk of defaulting on its massive borrowings because it faces several years of sluggish growth and mounting debt that current austerity plans may not be able to stem payday loans guaranteed no fax.

Those fiscal problems have also exposed the vulnerability of Europe’s monetary union in times of crisis. Euro members countries agree to limit their budget deficits to 3 percent of gross domestic output because overspending can undermine their shared currency. But those deficit rules have been broken repeatedly and have not been prevented Greece and other countries from trouble.

The leaders may make more comments on Greece later in the day.

Luxembourg government spokesman Guy Schuller said no firm bailout figures are on the table at this point, but many options are under discussion. “Paris and Berlin are at the head” of efforts that would be shared by all 16 eurozone nations, he said.

Among possibilities for Greece that have been floated in recent days are EU member countries guaranteeing Greece’s debt, a special credit line for the Greek government, and bilateral loans.

But German Chancellor Angela Merkel talked down a full financial bailout, but said other European governments would not leave Greece in the lurch.

“We won’t let Greece be alone but there are rules and they have to be respected and based on that we’ll issue a statement and an explanation,” she said.

Greece needs to borrow euro54 billion (nearly $75 billion) from bond markets this year to plug its budget gap. So far it has been able to borrow from markets but is facing increasing interest costs as markets price in higher risk of a possible default.

Greek Prime Minister George Papandreou has promised to reduce Greece’s deficit to 8.7 percent of gross domestic product this year, from 12.7 percent last year, the highest in the EU and four times above an EU limit.

But markets doubt Greece’s credibility after it admitted falsifying statistics for years to make the deficit look smaller. They also worry that Greece can’t carry out any cuts because it risks social unrest.

Greek workers shut down schools, grounded flights and walked out of hospitals Wednesday to protest austerity measures, and a much broader strike is planned for Feb. 24.

___

Associated Press writers Pan Pylas, Angela Charlton and Leslie Patton in Brussels contributed to this report.

EU leaders offer Greece support, but no money

FACTORY GROWTH AHEAD: Manufacturers’ new orders, a signal of future production, soared to their highest point since 2004. Companies said their customers’ inventories were still too low, so they foresee more production as customers restock.

HIRING UNLIKELY SOON: Rising production won’t necessarily equal a bump in full-time hires. Manufacturers still have excess capacity and access to contract labor. Jobs are scarce, and wages and salaries crept up only 0.1 percent in December. Many economists expect economic growth to slow to about 2 cashadvance.5 percent for the full year as spending remains constrained.

HOUSING ROCKY: Construction spending dropped 1.2 percent in December despite support from the Federal Reserve to hold down mortgage rates and a federal tax credit for homebuyers. Both programs are set to expire this spring.

Summary Box: Manufacturing activity shows strength

HONG KONG (Reuters) – Stocks in Asia tumbled on Friday, hurt by weak technology and resources shares and fresh worries about Greece's debt levels, which dragged the euro to a six-month low against the dollar.

However, leading European shares (.FTEU3) were expected to inch higher, halting the market's worst sell-off in a year, despite mounting worries about weak euro zone members.

U.S. stock futures pointed to a slightly weaker open after key Wall Street indexes fell by up to 1.9 percent overnight as poor earnings and outlooks from Motorola (MOT.N) and Qualcomm (QCOM.O) dented optimism in the tech sector. (.N)

A massive recall of millions of vehicles by the world's top automaker Toyota Motor Corp (7203.T) added to concerns about corporate earnings, while falling commodity prices hurt miners such as BHP Billiton Ltd (BHP.AX).

Samsung Electronics (005930.KS), the world's top maker of memory chips and LCD screens, failed to lift the gloom despite its forecast-beating earnings as Asian shares head for their worst monthly decline since January 2009.

Asia Pacific stocks outside Japan as measured by MSCI (.MIAPJ0000PUS) fell 2 percent to a 2-month low, with the materials index down 3.4 percent and the technology index off 1.8 percent.

Concerns over public finances in Greece and Portugal pulled the euro down to a six-month low against the dollar and a nine-month low versus the yen, a trend which has gained momentum as investors cut risky trades which had been funded by borrowing in the yen and dollar.

Investors have also been nagged this week by fears that the global economic recovery may be losing momentum, China's steps to cool its surging economy and political and regulatory wrangling in Washington.

"There is a general adjustment going on in risk appetite and risk sensitivity," said Peter Redward, head of Emerging Asia Research, Barclays Capital.

But he said the recent drop has been orderly and the sell-off has been notable because of the absence of panic.

"It shows there hasn't been a lot of large option-related, speculative position building. There isn't a lot of gamma floating around in terms of equities or fx," he added, referring to derivatives instruments which when triggered can lead to accelerated selling.

According to data from fund tracker EPFR Global, emerging markets equity funds saw their first week of net outflows in the period ended January 27 after 11 weeks of inflows as investors pared back their exposure amid fears of slowing growth in China, where authorities are reining in bank lending.

U.S. equity funds saw their biggest weekly outflow since late June while European equity finds suffered net redemptions for the third week in five, the data showed same day payday loans. But bond funds saw inflows, particularly emerging market local currency-denominated bonds.

The recent strength of the yen currency also hammered Japanese stocks, which received a further setback after Toyota announced it would extend to Europe and China a recall of millions of vehicles due to faulty accelerator pedals and floor mats.

Japan's Nikkei average (.N225) fell 2 percent to a six-week closing low, hurt by negative earnings surprise from chip equipment maker Advantest Corp (6857.T) which came after Nippon Steel Corp's (5401.T) warned of a first annual net loss in seven years. Advantest shares tumbled more than 10 percent.

Toyota fell 2 percent, bringing its losses this week to around 14 percent.

But analysts said broader market selling appeared to be largely driven by short-term investors, and funds with a longer-term horizon remained upbeat on the region's fundamentals.

"Some markets are quite oversold at the moment — the 12 month fundamentals for economies and earning are likely to be reasonably good," said Khiem Do, head of the Asia multi-asset group at Baring Asset Management, which oversees $50 billion.

"Prices are getting cheaper as a result of the liquidation of trading position. Our view is positive over next 6-12 months."

CURRENCIES

Currencies linked to global growth such as the Australian dollar and the New Zealand dollar fell to multi-week lows as investors moved out of higher-risk assets and on caution ahead of U.S. fourth-quarter GDP data to be released later on Friday at 8:30 a.m. EST.

Even though data on Thursday showed U.S. durable goods orders rose and jobless claims fell in the world's largest economy, analysts are wary it is not a strong recovery.

Mixed economic data from the world's other leading economies also continues to keep investors cautious.

After Japan's better-than-expected export growth earlier this week, data released on Friday showed the economy was in the grips of deflation with core consumer prices marking their tenth straight month of decline.

In commodities markets, crude oil looked set for a possible fourth day of losses sparked by forecasts of tepid oil demand in rich industrialized nations. U.S. crude futures eased 20 cents to $73.44 a barrel.

A firm dollar and concern over the pace and scope of credit tightening in China drove Shanghai copper down 3.5 percent, following a drop in London prices in the previous session.

(Editing by Kim Coghill)

Asia shares slide on resources, euro zone woes

TOKYO – Japan’s trade minister is urging Toyota Motor Corp. to secure the confidence of car buyers in the wake of massive global recalls.

“The scale of the recalls is huge. The situation is serious. It points to the possible dangers a global economy can bring,” Trade Minister Masayuki Naoshima told reporters Friday.

“I would like Toyota to respond properly to secure consumer confidence.”

Toyota — the world’s largest automaker — has recalled 7 payday loans.65 million vehicles in the U.S. over problems with gas pedals and floor mats. It recalled 75,500 vehicles in China for the same acceleration pedal problem.

The auto giant also said it would recall vehicles in Europe due to the accelerator problem, but said the number of recalled vehicles has yet to be determined.

Japan urges Toyota to secure consumer confidence

NEW YORK (MarketWatch) — Citigroup Inc. said Tuesday that it posted a fourth-quarter loss of $7.6 billion, in line with analysts’ estimates, accounting for more than $6 billion in expenses associated with the payback of some government investments.

The $7.6 billion loss amounted to 33 cents a share, compared with a loss of $17.24 billion, or $3.40 a share, in the year-ago quarter.

Citigroup Chief Financial Officer John Gerspach in the company’s fourth-quarter earnings release Tuesday said that although Citi remains “cautious and continues to monitor the future impacts of our current loss mitigation efforts, we continue to see indications that credit may be stabilizing or improving, particularly in Asia and Latin America.”

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The CFO said the company had made “significant progress” in 2009. “While the environment continues to be challenging, we have a strong capital base and client franchise.”

“Provisions and charge-offs were lower than we expected, suggesting that Citi’s outlook for its loan book has improved, particularly in corporate and international portfolios,” Standard & Poor’s analysts said in a Tuesday report prepared for clients. “We think the pace of reserve building will continue to slow, allowing for an earnings improvement in 2010.”

The S&P analysts raised their Citi earnings estimate 2010 by 7 cents, to breakeven, but kept their share-price target price at $4.50, labeling that level “a premium to projected tangible book value, but a discounted multiple to peers.”

Citigroup shares responded initially by retreating 3% in early trades Tuesday. Read more about share price in MarketWatch First Take.

On an adjusted basis, excluding the $6 no fax needed payday loans.2 billion after-tax loss associated with TARP repayment and exiting a loss-sharing agreement, the fourth-quarter net loss was $1.4 billion, or 6 cents a share, the company said. Analysts polled by Thomson Financial had, on average, had expected the company to lose 33 cents a share in the quarter.

Citi said fourth-quarter net credit losses fell by about $800 million from the third quarter to $7.1 billion, marking a second straight quarter of improvement.

It said it added $700 million to its loan-loss reserve, down from roughly $800 million in the prior quarter.

Grooming the ‘dogs’ for a comeback

Despite lackluster recent performance, the Dogs of the Dow investment strategy still has fans. And this year’s roster may be kinder to investors.

The total allowance for loan losses at the end of 2009 was $36 billion, or 6.1% of total loans, compared with $36.4 billion, or 5.9% of total loans, in the third quarter, the bank said.

At year-end, the Tier 1 capital ratio was 11.7%. Tier 1 common ratio was 9.6%, up from 2.3% a year ago. Tier 1 common was $104.6 billion, up from $22.9 billion a year ago.

Citi sees higher credit costs in first quarter of 2010

Citigroup forecast higher credit costs in the first quarter of 2010 as loan losses continue in its the mortgage and credit-card businesses.

However, the financial-services heavyweight said that there could be improvement after the first quarter, depending on the direction of the U.S. economy. The company was also optimistic about its overseas businesses.

Citi shares went on to reverse their morning losses, and then some, climbing 3.2% to $3.54.

“Credit looks much better than we expected,” Jeff Harte, an analyst at Sandler O’Neill, wrote in a note to investors. “Credit improvement seems more pronounced in Citi’s international businesses.”

Citi’s $7.6 bln loss hits Wall Street target

NEW YORK (MarketWatch) — Stocks suffered the worst one-day decline of 2010 so far, led by the financial sector, which slid after J.P. Morgan Chase’s announcement of weaker-than-expected revenue and a glum outlook.

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The Dow Jones Industrial Average , which hadn’t posted a daily decline of more than 37 points in January before Friday, ended down 100.75 points, or 0.9%, at 10,609.80.

The average racked up a triple-digit point loss in the first hour of trading and never quite recovered, hurt by selling across every sector.

Twenty-seven of the Dow’s 30 components were lower, with financial companies suffering the worst losses. Bank of America Corp. was off 3.3% and J.P. Morgan Chase fell 2.3% after it announced its results prior to the opening bell. The bank’s fourth-quarter earnings quadrupled, exceeding forecasts, but its revenue came in below analysts’ estimates.

Chief Executive James Dimon warned the banking giant is cautious about the future, noting “consumer-credit costs remain high, and weak employment and home prices persist.”

That message was the opposite of what traders have been hoping to hear since the start of the broader fourth-quarter reporting season on Monday.

While participants have welcomed improving corporate bottom lines in the last few quarters, improvements in revenue have been hard to come by.

Dow component Intel Corp. , which released its earnings report late Thursday, was off 3.2%. The chip maker’s fourth-quarter profit surged nearly 10-fold from the depressed year-earlier period, as revenue jumped 28% payday loans. However, analysts and investors are wondering whether there’s more room for the stock to climb after its most profitable quarter in history.

Some participants have similar concerns about the market as a whole, considering that major indexes entered trading Friday at 15-month highs despite lingering weakness in the U.S. economy.

Hot Stocks: Financials Weak After J.P. Morgan

J.P. Morgan Chase’s retreat sets bearish tone for the banking sector. Bank’s report of higher profit is overshadowed by CEO Jamie Dimon’s cautious remarks. Greg Morcroft reports.

“To have two marquee-name companies like J.P. Morgan and Intel put out their earnings and have the market react like this is a very bad sign,” suggesting that a broader correction may be in store, said strategist Bill King, of M. Ramsey King Securities. “The flow of institutional money into the market has really dried up; no one wants to be buying at these levels.”

The technology-heavy Nasdaq Composite fell 1.2%. The Standard & Poor’s 500 fell 1%. All its sectors fell, led by a 2% pullback in financials.

Economic data did little to offset investors’ earnings jitters. A new reading of consumer sentiment was worse than expected, though data on manufacturing in the New York region were surprisingly strong. Readings of consumer prices and industrial production were in line with Wall Street’s forecasts.

The dollar was higher against the euro but lower against the yen. Treasurys edged higher, with the 10-year note up 16/32 to yield 3.682%. Crude-oil futures slipped to $78 a barrel and gold futures also moved lower.

Market Snapshot: Stocks post worst one-day drop of 2010

NEW YORK – The following stocks were among those that moved substantially or traded heavily Tuesday on the New York Stock Exchange and the Nasdaq Stock Market:

NYSE:

Tiffany & Co., down 24 cents at $46.44

The luxury jeweler boosted its annual profit forecast and said strong worldwide sales during the holidays will likely help results.

KB Home, down 66 cents at $15.72

The homebuilder turned a profit in its fiscal fourth quarter, the first time since early 2007, as it benefited from a new tax rule.

Alcoa Inc., down $1.93 at $15.52

The world’s largest aluminum maker posted worse-than-expected earnings for the fourth quarter on soft demand.

Kraft Foods Inc., up 49 cents at $29.29

Cadbury PLC stepped up its defense against a hostile takeover bid from Kraft by announcing that 2009 results will beat expectations.

Great Atlantic & Pacific Co payday cash advance loans., down $2.66 at $10.22

The operator of A&P and other grocery chains said losses grew sharply due to drastic changes in shopping habits at supermarkets.

Gap Inc., down 66 cents at $19.96

A Goldman Sachs analyst downgraded the clothing retailers stock, saying few factors will boost its profit soon.

Salesforce.com Inc., down $5.36 at $68.29

The company said it plans to raise $500 million by offering convertible senior notes and received a downgrade from an analyst.

KKR Financial Holdings LLC, down 37 cents at $6.31

The investment firm said its fourth-quarter results will be hurt by non-cash charges on mortgage investments and corporate loans.

Tiffany, KB Home, Alcoa, Kraft are movers

First New York City required restaurants to cut out trans fat. Then it made restaurant chains post calorie counts on their menus. Now it wants to protect people from another health scourge: salt.

On Monday, the Bloomberg administration plans to unveil a broad new health initiative aimed at encouraging food manufacturers and restaurant chains across the country to curtail the amount of salt in their products.

The plan, for which the city claims support from health agencies in other cities and states, sets a goal of reducing the amount of salt in packaged and restaurant food by 25 percent over the next five years.

Public health experts say that would reduce the incidence of high blood pressure and should help prevent some of the strokes and heart attacks associated with that condition. The plan is voluntary for food companies and involves no legislation. It allows companies to cut salt gradually over five years so the change is not so noticeable to consumers.

“We all consume way too much salt, and most of the salt we consume is in the food when we buy it,” said Dr. Thomas Farley, the city health commissioner, whose department is leading the effort. Eighty percent of the salt in Americans’ diets comes from packaged or restaurant food. Dr. Farley said reducing salt from those sources would save lives.

Since taking office, Mayor Michael R. Bloomberg, who just began his third term, has gained a reputation as an advocate for healthy living, initiating prominent campaigns against smoking and harmful trans fats. To combat obesity, he has campaigned for calorie labeling on restaurant menus and warned consumers about sugary soft drinks.

The city’s salt campaign is in some ways more ambitious and less certain of success than the ones it waged against smoking and obesity. For one thing, the changes it prescribes require cooperation on a national scale, city officials said, because major food companies cannot be expected to alter their products for just the New York market.

And removing salt from many products can be complicated. Salt plays many roles in food, enhancing flavor, preventing spoilage and improving shelf life. It helps bread to rise and brown.

The city’s campaign against salt resembles its push to cut trans fat from restaurant foods, which began with a call for voluntary compliance. When that did not work, the city passed a law to force restaurants to eliminate trans fat.

But city officials said it would be difficult to legislate sodium reduction.

“There’s not an easy regulatory fix,” said Geoffrey Cowley, an associate health commissioner. “You would have to micromanage so many targets for so many different products.”

He said officials hoped the campaign would work through public pressure. Companies that complied would benefit from good publicity.

The city has been discussing the program with the food industry since late 2008, yet only a few companies appear ready to jump on board. One of those is A.& P., the supermarket chain.

“We think it’s a very realistic set of criteria that our suppliers can adhere to,” said Douglas A. Palmer, vice president for store brands at A.& P.

He said the company expected to embrace the city’s salt reduction goals for the hundreds of store brand products it sells under labels like America’s Choice and Smart Price in 435 supermarkets throughout the Northeast and Mid-Atlantic regions. In Manhattan, the chain operates under the name Food Emporium.

Subway, the fast food sandwich chain, also said it expected to commit to the city’s salt guidelines at its nearly 23,000 stores across the country lowest fee payday loans.

Lanette R. Kovachi, Subway’s corporate dietitian, said the company has reduced salt in stores in several other countries, including Britain and Australia, in response to government programs there.

“We view these as achievable goals,” she said.

The company’s best-selling item, a six-inch turkey sandwich, is already below the city’s five-year average target for lunch meat sandwiches in restaurants. But the chain also has a six-inch spicy Italian sub whose salt content is well above the city’s goals.

On Monday, after a year of consultations with industry, the city will release preliminary targets for sodium content. After a review, the city will unveil final targets in the spring and ask companies to commit to the program.

The system proposed by the city is complex, with reductions ranging from 10 to 40 percent for 61 classes of packaged foods and 25 classes of restaurant foods.

It would measure the average salt content of a company’s entire line of a particular type of product, like canned vegetables, breakfast cereals or frozen dinners, adjusted to give greater weight to products with the highest sales. That would allow companies to maintain a range of sodium levels but would create incentive to cut back on salt in the most popular items.

While most food companies say they agree at least with the goal of reducing salt, some medical researchers have questioned the scientific basis for the initiative, saying insufficient research had been done on possible effects. While agreeing that reducing salt is likely to lower average blood pressure, they say it can lead to other physiological changes, some of which may be associated with heart problems.

An elaborate clinical trial could weigh the pluses and minuses of cutting salt in a large group of people. But that would cost millions, and it has not been done.

Dr. Michael H. Alderman, a professor at the Albert Einstein College of Medicine, said the city’s initiative, if successful in reducing salt, would amount to an uncontrolled experiment with the public’s health.

“I’m always worried about unintended consequences,” he said.

The federal government recommends that sodium intake from salt be limited to 1,500 to 2,300 milligrams a day, with the latter figure equaling about a teaspoon. But the average adult in this country consumes about 3,400 milligrams a day.

Several major companies, including some that have been leaders in reducing salt, said they would not join the city initiative.

“One of the things we want to bring across to New York City is that sodium reduction does not always follow a prescribed time or prescribed progress,” said Chor-San Khoo, vice president for global nutrition and health at the Campbell Soup Company. “There’s no one size fits all.”

Campbell has already made significant reductions in the amount of salt in many of its products, including many canned soups, V8 beverages and Pepperidge Farm breads.

“We will continue to reduce sodium as long as there’s consumer acceptance in the marketplace,” Ms. Khoo said.

ConAgra, which makes a wide array of products, including Hunt’s canned tomato products and Chef Boyardee packaged meals, said it would continue with previously announced plans to cut the sodium in its portfolio of products by 20 percent by 2015.

“We don’t have plans to join other organizations’ pledges,” the company said.

Citing Hazard, New York Says Hold the Salt

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