New York - Wall Street stock indices rose Thursday as transportation firms were helped by falling oil prices, and banking shares staged a late-day rally on takeover speculation about embattled Lehman Brothers Holdings Inc.

US railroad company CSX Corp surged more than 10 per cent as crude oil for October delivery fell another 1.68 dollars to 100.90 dollars per barrel in New York.

Financial shares had plunged more than 4 per cent during the day but recovered to post a 1.5-per-cent gain by the end of the session, after The Wall Street Journal reported that Lehman was shopping around for a possible takeover.

The Washington Post reported late Thursday that the government has agreed to subsidize any takeover of Lehman, one of many banks still reeling from the ongoing credit crisis in the United States.

The fourth-largest US investment bank posted its largest-ever quarterly loss of 3.9 billion dollars on Wednesday. Lehman's own shares tumbled more than 40 per cent in Thursday trading.

The blue-chip Dow Jones Industrial Average jumped 164.79 points, or 1.46 per cent, to 11,433.71. The broader Standard & Poor's 500 Index rose 17.01 points, or 1.38 per cent, to 1,249.05. The technology-heavy Nasdaq Composite Index gained 29.52 points, or 1.38 per cent, to 2,258.22.

The US currency fell to 71.24 euro cents from 71.48 euro cents on Wednesday. The dollar dropped against the Japanese currency to 107.28 yen from 107.77 yen.

Gold dropped to 745.50 dollars from 762.50 dollars per fine ounce on Wednesday. (dpa)