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Stocks Plunge at Open

AIG, Lehman take huge hits, but Merrill takeover stabilizes market slightly

By Kevin Spak, Newser Staff

Posted Sep 15, 2008 9:09 AM CDT

(Newser) – Stocks tumbled at the opening bell this morning, with the Dow dropping more than 300 points after a weekend that turned the financial industry on its head. Lehman Brothers’ collapse and AIG’s request for $40 billion from the Federal Reserve “are causing a major financial panic this morning,” said one strategist—though Bank of America’s takeover of Merrill Lynch injected some optimism, CNNMoney reports.

The S&P fell 2.5%, while the Nasdaq dropped 2.5%. “We've never witnessed this before,” said one strategist. “There's no road map for this.” Lehman fell 93%, while AIG dropped 44%. But Merrill leapt 39%, thanks to the buyout that was the market’s ray of hope. “It says there's life after death," said one strategist. Bank of America's magnanimity was met with a 13% decline.

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Traffic passes a branch of the Bank of America today in New York. (AP Photo)

A man looks out the window at the Lehman Brothers headquarters in New York, Monday, Sept. 15, 2008. (AP Photo/Mary Altaffer)

An onlooker reacts as he watches stock prices on a screen on the facade of the Bombay Stock Exchange in Mumbai, India, today. (AP Photo)

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When a company like Bank of America wants to buy one of the biggest retail brokers in existence, it says there's life after death. - Mike Lenhoff, chief strategist at Brewin Dolphin Stockbrokers

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Stocks Plunge at Open