e39 99 528i transmission
 

I am only getting 2and3rd gear and speedo quit working and traction control light is on and abs light is on

Get the codes read - report back.

ok this happens often when wet outside what i do is manually shift by going from drive to 3rd gear and back up this shifts it then i would check the abs light it could be water just got on it or that it shorted but that would be my advice i have no idea if this is bad for trans ive done it a lot and my trans is still rocking again just my experience

Wheel speed sensors... rear drivers side wheel speed sensor will cause speedometer issues and front passenger wheel speed sensor affects the shifting . This was the first issue I dealt with when I bought my 97 528i. I had same lights lit and same symptom.