New York - Major US stock indices posted some of their worst
losses in years on Monday in response to a significant deepening of
the credit crisis and fears of widespread banking failures in the
United States.
The blue-chip Dow Jones Industrial Average tumbled more than 500
points - some 4.4 per cent - and closed below 11,000 for its biggest
one-day drop since the September 2001 terrorist attacks. The broader
Standard & Poor's 500 Index plunged more than 4.7 per cent for its
lowest close since October 2005.
The bankruptcy filing Monday morning of Lehman Brothers Holdings
was at the centre of the day's dramatic sell-off as the fourth-
largest US investment bank shed 94 per cent of its share price.
That was followed by a desperate search for fresh capital by
American International Group, the largest US insurer. Reports said
AIG was looking for 40 billion dollars in bridge loans from the
Federal Reserve. Its shares dropped more than 60 per cent.
Bank of America Corp's emergency 50-billion-dollar takeover of
financial services firm Merrill Lynch & Co also had little impact on
the run on financial stocks. Bank of America's own shares were down
more than 20 per cent on the day.
Negotiations throughout the weekend failed to produce a buyer for
the 158-year-old Lehman Brothers firm after the US Treasury refused
to put up taxpayer funds to facilitate a deal, leading to the largest
bankruptcy filing in US history Monday morning.
The Dow fell 504.48 points, or 4.42 per cent, to 10,917.51. The
S&P 500 was down 59 points, or 4.71 per cent, to 1,192.70. The
technology-heavy Nasdaq Composite Index plunged 81.36 points, or 3.6
per cent, to 2,179.91.
The US currency fell to 70.13 euro cents from 70.30 euro cents on
Friday. The dollar plunged against the Japanese currency to 104.86
yen from 107.94 yen on Friday.
USA
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