Wall Street Retreats as Financials Weaken

By: AP
By: AP

NEW YORK - Stocks turned lower Tuesday after fresh worries about the stability of Lehman Brothers Holdings Inc. touched off renewed jitters about the overall financial sector.

Another drop in oil prices weighed on the energy sector.

Wall Street's pullback comes a day after the biggest rally in a month in the Dow Jones industrial average so some retrenchment might have been expected. But the latest unease punctured a sense of optimism about the financial sector that followed the government's decision to seize control of mortgage lenders Fannie Mae and Freddie Mac.

Lehman fell $4.65, or 33 percent, to $9.50 as investors worried that the No. 4 U.S. investment bank is having trouble finding fresh sources of capital. Many financial companies, including Lehman, have struggled with souring mortgage debt on their books.

In late morning trading, the Dow Jones industrial average fell 111.30, or 0.97 percent, to 11,399.44.

Broader indexes were also fell. The Standard & Poor's 500 index declined 19.41, or 1.53 percent, to 1,248.38 and the Nasdaq composite index fell 21.01, or 0.93 percent, to 2,248.75.

The declines ate into returns logged Monday when the Dow jumped 2.6 percent, the S&P 500 rose 2.1 percent and the technology-heavy Nasdaq composite index added 0.62 percent.

Bond prices rose as stocks retreated. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.64 percent from 3.68 percent late Monday.

Light, sweet crude fell $2.08 to $104.26 on the New York Mercantile Exchange. The dollar was mixed against other major currencies, while gold prices fell.


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