Housing, AIG Spur Losses

AIG is the troubled financial firm du jour
By Nick McMaster,  Newser Staff
Posted Aug 25, 2008 3:27 PM CDT
Traders keeps an eye on the numbers during the last half hour of trade on the floor of the New York Stock Exchange in this undated file photo.   (AP Photo/Mary Altaffer)
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(Newser) – Stocks fell today as bad news from the housing and financial sectors diminished hopes that the economic slump will lift soon, the Wall Street Journal reports. The Dow fell 241.81 points to 11,386.25, led by a 5.5% loss at beleaguered insurer AIG. The Nasdaq fell 49.12 points to close at 2,365.59, while the S&P 500 shed 25.36 points to settle at 1,266.84.

AIG led financials down as the threat of a Fitch downgrade loomed and Credit Suisse analysts predicted a third-quarter loss at the insurance giant. Lehman Bros fell 6.7% as a Korean buyout looked less likely. US home prices continued to fall despite rising sales, showing that the housing market has yet to reach a bottom.