CLOSING MARKET REPORT
Wall Sreett mauled by Lehman bankruptcy, AIG fears

* Wall Street has worst day since September 2001
* Lehman Brothers files for bankruptcy
* Bank of America buys Merrill Lynch
* AIG shares off over 60% on capital fears
* Dow off 4.4%, S&P down 4.7%, Nasdaq off 3.6%

NEW YORK - Wall Street had its worst day since markets reopened after the Sept 11 attacks as fears about the US financial system's stability surged on Monday after Lehman Brothers filed for bankruptcy and insurer AIG struggled for survival.

The day followed one of Wall Street's most agonizing weekends ever, which saw the demise of Lehman Brothers and forced Merrill Lynch to accept a takeover by Bank of America Corp (BOA).

But Sunday's barrage of shocking news was no exorcism for anxious investors and traders. As concerns about American International Group's (AIG) scramble for capital mounted, the Wall Street Journal reported that the US government has asked Goldman Sachs and JPMorgan Chase to lead a lending facility of US$70 billion to US$75 billion for the insurer.

Financial services companies' shares led a broad and steep decline in major indexes as investors worried about the impact of the latest twists in the credit crisis on the economy and the outlook for profits.

The benchmark Standard & Poor's 500 index fell 59.00 points, or 4.71 per cent, to 1,192.70 - posting its biggest percentage drop since the day that markets reopened after the Sept 11 attacks in 2001.

The S&P 500 also tumbled to its lowest close since October 2005, taking out a key technical support level as it fell.

The Dow Jones industrial average slid 504.48 points, or 4.42 per cent, to 10,917.51 - its biggest one-day point drop since September 2001.

The Nasdaq Composite Index dropped 81.36 points, or 3.60 per cent, to 2,179.91.

Lehman, weighed down by losses spawned by the US mortgage crisis, sought bankruptcy protection on Monday following a scramble over the weekend in which it failed to find a buyer.

Merrill Lynch, meanwhile, agreed to be bought by BOA, the No 2 US bank. Merrill's stock closed just 0.1 per cent higher at US$17.06, but BOA's shares dropped 21.3 per cent to US$26.55.

Source: Singapore Business Times - 16 Sep 2008