Lehman Brothers Holdings said it plans to sell a majority stake in its investment management unit and spin off commercial real estate assets, but failed to announce specific transactions and posted a third-quarter loss of $3.93 billion.

Shares of Wall Street's fourth-largest investment bank gave up some of their overnight gains as investors expressed disappointment that Lehman, whose business model and outlook face wide scrutiny, did not announce more concrete actions.

"What you are dealing with is a confidence issue," said Doug Roberts, chief investment strategist at Channel Capital Research in Shrewsbury, New Jersey, "There is still an underlying level of uncertainty as to what Lehman's future is. Essentially, what people are saying is that there has been no resolution of the problem."    

World stocks fell toward two-year lows on Wednesday as the problems faced by Lehman stoked concern that banks are struggling to rebuild capital and financial markets remain brittle. The Japanese yen trimmed losses, while Treasury prices fell.

In pre-market trading, Lehman shares were up $1.14, or 14.6 percent, at $8.93 after earlier trading above $10. On Tuesday the shares fell $6.36, or 45 percent, cutting Lehman's market value to $5.4 billion, down more than $40 billion since February 2007.

Lehman said it intends to sell about 55 percent of a portion of its investment management unit, including asset management unit Neuberger Berman and the private equity and wealth management businesses. It said it was in "advanced discussions with a number of potential partners" for such a sale.

The company also said it intends to spin off $25 billion to $30 billion of its commercial real estate assets into a new publicly traded company, Real Estate Investments Global.

Lehman said it was in talks with BlackRock Inc to sell $4 billion of its UK residential mortgage portfolio, and expects to complete a sale in the next few weeks. It said this would reduce its residential mortgage exposure 47 percent to $13.2 billion.

Lehman also slashed its annual dividend to 5 cents per share from 68 cents, to save $450 million a year. On a conference call, the company said it does not believe it needs to raise further capital.

Chief executive Richard Fuld is under pressure to restore profit after mortgage-related losses contributed to $5.6 billion of net write-downs in the third quarter, on top of more than $7 billion of credit-related write-downs and losses since the global credit crisis began.

"We're on the right track to put these last two quarters behind us," Fuld said on the conference call.

Lehman said its net loss applicable to common shareholders was $4.09 billion, or $5.92 per share, for the third quarter, ended Aug 31. Net revenue was negative $2.9 billion, reflecting the write-downs.-Reuters