NEW YORK (Reuters) - Wall Street had its worst day since markets reopened after the September 11 attacks as fears about the U.S. 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 (MER.N) to accept a takeover by Bank of America Corp (BAC.N).
But Sunday's barrage of shocking news was no exorcism for anxious investors and traders. As concerns about AIG's scramble for capital mounted, the Wall Street Journal reported that the U.S. government has asked Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N) to lead a lending facility of $70 billion to $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 turmoil continues," said Robert Francello, head of equity trading for Apex Capital, a San Francisco hedge fund.
"And it seems to be people underestimated the impact of AIG and what the fallout of that could be."
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Topic: Lehman crashes, Merrill lynched, US economy mauled (Read 661 times)