NEW YORK (AP) -- Investment bank stocks soared Tuesday after Goldman Sachs and Lehman Brothers reported better-than-expected profits that soothed the frayed nerves of investors who were bracing for a domino effect after the near-failure of Bear Stearns.

But the good news from two of the industry's top names hardly put investment banks in the clear, and their executives are learning to accept more openness in Wall Street's secretive culture.

"It is no longer OK to be in a black box," Lehman Chief Financial Officer Erin Callan told The Associated Press. "There will be a lot more honesty from us as an industry, and it is painfully obvious this will be the biggest change."

Investors were bolstered not just by the investment bank earnings but by the Federal Reserve's move to cut interest rates. They responded by sending brokerages and investment banks to their best finish since 2001, lifting the Dow Jones industrials more than 420 points.

Investment banks are notorious for being tightlipped about trading positions, tactics, and the contents of their multibillion dollar portfolios. That information could give rivals an edge and cost billions of dollars in a split-second trade.

Those days might have ended when Bear Stearns Chief Executive Alan Schwartz assured investors last week that the fifth-largest U.S. investment bank had a strong balance sheet with plenty of cash. He gave few other details, and full-fledged panic ensued.

Clients fled for the exits, decimating the stock price. By the weekend, Schwartz was forced to sell his company for just $2 a share to JPMorgan Chase & Co. to avoid bankruptcy.

The rest of Wall Street paid attention.

On Tuesday, Lehman Brothers Holdings Inc. provided much more information about its balance sheet and operations than in past quarters. Callan spent almost an hour -- instead of the usual 20 minutes or so -- briefing analysts on a conference call before taking almost an hour's worth of questions.

Goldman Sachs Chief Financial Officer David Viniar did much the same. He gave details about the company's proprietary trading desk, which the firm typically doesn't reveal much about, and made a point of specifying how much cash is on the balance sheet.

The strategy appeared to pay off.

"What we saw from the investment banks was the best we've seen so far," said Matthew Albrecht, an equity analyst who follows investment banking for Standard & Poor's.

"Investors are requiring more information," he said. "And when it comes down to it, they don't want to own what they don't understand. The best way for that to happen is when transparency trickles down to the common investor."

Lehman shares surged more than 46 percent after the bank reported first-quarter earnings of $489 million, or 81 cents per share, to surpass analysts' expectations. While that figure was still down significantly from a year earlier, investors and analysts were pleased that there were no surprises -- and that the investment bank did not skimp on details.

Shares of Goldman Sachs Group Inc. hit a 52-week low Monday but rose more than 16 percent Tuesday after it reported first-quarter numbers that were better than Wall Street expected. Those figures were also sharply lower than a year ago.

Goldman Sachs, the world's largest investment bank, posted a profit of $1.51 billion, or $3.23 a share, for the quarter that ended last month.

But both Goldman and Lehman said investment banks still face a number of obstacles, and could not predict when the credit markets would begin to turn around.

Goldman posted net losses on residential mortgages and securities of $1 billion. Credit products produced another $1 billion loss, and investment banking returns were sluggish.

"Market conditions are clearly very difficult," Chairman and Chief Executive Lloyd Blankfein said in a statement.

Lehman took a $1.8 billion write-down during the first quarter because of deterioration in the credit markets. It had taken about $2.13 billion in write-downs in the previous two quarters combined. Capital markets revenue fell 52 percent to $1.7 billion because of continued deterioration of the credit and mortgage markets.

The company's chairman and chief executive, Richard Fuld, characterized the credit environment as "challenging."

Bear Stearns, one of Wall Steet's most storied investment banks, was forced to sell itself just days after its cash supply evaporated in a matter of hours, as investors and lenders worried over the company's investments in risky debt.

"Will it ever get better -- yes. 'When' is a harder question to answer," Viniar said. "Until there is greater certainty and people start feeling better about the markets, I don't see things picking up dramatically."

Callan agreed, adding that this week could have seen a "black arm band day" after shares of investment banks plunged on Monday.

"We're telling people all the facts that we need to know, and giving them all the information," she said. "And that will help to regain their confidence."

------ AP Business Writer Stephen Bernard contributed to this report.

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