U.S. stock futures sharply pared gains Wednesday morning after an update from Lehman Brothers Holdings failed to allay worries about the future of the firm.

The Wall Street investment bank said it expects a US$3.9 billion loss in the third quarter, and announced plans to sell a majority stake in its investment management unit.

Investors’ attention was focused on Lehman after concerns over the company’s ability to raise capital and shed underperforming assets sent the bank’s shares sharply lower Tuesday.

Here at home, business productivity declined for a third consecutive quarter, falling 0.2% in the second quarter of 2008, Statistics Canada said.

StatsCan noted that business productivity declined of 0.6% in each of the previous two quarters, and said this is the longest series of consecutive quarterly declines since 1990.

The Canadian dollar opened at US93.55¢, up 0.14 of a cent from Tuesday’s close.

The price of oil edged slightly higher Wednesday after OPEC vowed to abide by its quotas but decided not to take the more dramatic step of slashing production targets.

Light, sweet crude for October delivery rose eight cents to $103.34 a barrel in electronic trading on the New York Mercantile Exchange.

In Canadian earnings news, Transat A.T. Inc. reported a third-quarter net loss of $2.4 million, reversing a year-ago $16.1 million profit, as tour operators were unable to adjust prices to keep up with surging fuel costs.

In Asia, markets ended mostly lower. Japan’s Nikkei 225 average fell 0.44% to 12,346.63 and Hong Kong’s Hang Seng Index dropped 2.4% to 19,999.78.

European shares also slipped. France’s CAC 40 was off 42.34 points at 4,251, Germany’s DAX was down 56.08 to 6,177.33 and the UK’s FTSE 100 was down 65 points at 5,350.6

Toronto stocks plummeted almost 500 points on Tuesday as commodities prices continued to fall.

The resource-heavy S&P/TSX composite index closed down 487.58 points, or 3.86%, at 12,147.06.

The benchmark index has lost 1,624 points in the past week and now sits at its lowest point since late January.

Small cap stocks suffered significantly greater losses than those on the big board. The junior S&P/TSX Venture composite index plunged 150.37 points, or 8.49%, to end at 1,621.26.

In New York, U.S. stocks finished sharply lower as financial shares sold off on worries about Lehman Brothers.

The Dow Jones industrial average fell 280.01 points, or 2.43%, to 11,230.73.

The S&P 500 fell 43.28 points, or 3.41%, to 1,224.51, its worst percentage decline since February 2007.

The tech-heavy Nasdaq dropped 59.95 points, or 2.64%, to 2,209.81.