US stocks sank on Tuesday as fears about further problems in the financial sector resurfaced on anxiety about the ability of Lehman Brothers to raise much-needed capital. Shares of Lehman skidded more than 30 percent, suffering their biggest percentage decline ever, after reports that the investment bank's talks with a Korean bank on a possible capital infusion had ended.
Shares of American International Group, the world's biggest insurer, which also has substantial exposure to the mortgage market, fell more than 12 percent and were the biggest drag on the S&P 500. The Dow Jones industrial average was down 67.34 points, or 0.59 percent, at 11,443.40. The Standard & Poor's 500 Index was down 15.10 points, or 1.19 percent, at 1,252.69. The Nasdaq Composite Index was down 15.19 points, or 0.67 percent, at 2,254.57.