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Closing Bell:

Let the good times roll. Lehman Brothers (LEH) Chairman and CEO Richard Fuld has been stubbornly trying to transform Lehman into more than just a bond house ever since American Express (AXP) spun off the company in 1994. He appears to be on the right track. On Mar. 16, Fuld, who got his start at Lehman as a commercial-paper trader in 1969, surprised Wall Street with record first-quarter earnings. Profits totaled $670 million, up an astonishing 123% from a year earlier.

Blowout bond-trading returns were a big factor -- revenues from fixed-income trading jumped 80% -- but there was more to the results than that. Equity sales and trading revenues increased 124%, while investment-banking revenues were up 39%. As the economy recovers, analysts expect the bond bonanza that has fueled Lehman's earnings lately to fade. When that happens, the firm will have to rely more on its asset-management, brokerage, and investment-banking businesses. Luckily, Fuld has been building them up. Good news and bad news for Bank of America (BAC) Chief Executive Kenneth Lewis: On Mar. 17, his $47 billion bid for FleetBoston Financial (FBF) was overwhelmingly approved by shareholders, making BofA the third-largest U.S. bank, with $1 trillion in assets. The deal gives BofA a big footprint in New England, where it had scant presence. Two days earlier, the Charlotte (N.C.) bank settled with New York State Attorney General Eliot Spitzer and the Securities & Exchange Commission, agreeing to pay $675 million in fines and restitution. It is the highest ever paid by any firm involved in the late-trading scandal with New York hedge-fund firm Canary Capital Partners. The bank shelled out an additional $70 million in March to settle with both the New York Stock Exchange and the SEC on other insider-trading issues. The Internet taketh away, but it also giveth. Just ask FedEx (FDX). The diminishing need for businesses to ship documents by air express wouldn't seem to bode well for FedEx, which is identified with shipping documents that "absolutely, positively" have to get there overnight. But the Memphis-based company has made the transition to delivering books, CDs, and other goods from online retailers. As a result, its bottom line remains strong: On Mar. 17, it reported a 41% jump in fiscal third-quarter profits, to $207 million. FedEx also surprised analysts with an upbeat forecast for the year. Nortel Networks (NT) benched two of its top financial officers on Mar. 15, amid an internal audit of its books by an independent firm. By placing its chief financial officer and controller on paid leave, the Brampton (Ont.) telecom-equipment maker raised investor concern that it faced more serious accounting problems than expected. Neither exec could be reached for comment. Nortel warned on Mar. 10 that it would likely restate financial results for the second time in six months. It hasn't said when the audit will be complete, but it will not meet the Mar. 30 deadline for filing key financial documents with the SEC. It's Barry Diller vs. the French, part deux. More than a year ago, Diller's InterActiveCorp (IACI) sued Vivendi Universal (V) over tax-related payments it said should have been paid on dividends for preferred shares that it owns in the French company. Now Vivendi, weeks away from closing its deal to sell its Hollywood studio and other holdings to General Electric's (GE) NBC unit, has sued Diller. Vivendi alleges that Diller is trying to hold up the NBC deal by refusing to sign a $1.9 billion letter of credit to secure those preferred shares. Vivendi also says Diller is trying to use the letter of credit to put pressure on Vivendi to resolve the tax issue. NBC, meanwhile, says that Diller isn't its problem, and intends to close the deal sometime this spring. Diller had no comment other than "we will prevail." -- Dealmaker John Malone says he'll spin off Liberty Media's (L) international assets.

-- Bear Stearns' (BSC) fiscal first-quarter profits rose 32%.

-- Former Attorney General Nicholas Katzenbach was named chairman of MCI (MCWEQ). Dallas Mavericks owner Mark Cuban wants his mamma, and he's not alone. On Mar. 16, shares of (MAMA) soared 24%, to $9.78, after Cuban, who in 2000 sold to Yahoo! (YHOO) for $5.7 billion, disclosed his 6.3% stake in the Internet search engine to the SEC.

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