U.S. Stocks Drop, S&P 500 Sinks Most Since 2001 Terror Attacks

By Lynn Thomasson and Elizabeth Stanton
Bloomberg

Sept. 15 (Bloomberg) -- U.S. stocks tumbled, pushing the Standard &
Poor's 500 Index to the steepest drop since the September 2001 terrorist
attacks, as Lehman Brothers Holdings Inc.'s bankruptcy and declining
commodities increased speculation that credit-market losses and the
economic slowdown will worsen.

Lehman plunged 94 percent and American International Group Inc. sank 61
percent after more than $25 billion in losses from subprime-related
investments in the last four quarters made with mostly borrowed money.
Economic concerns pushed down oil, prompting a drop in energy stocks,
and sent General Electric Co. to an 8 percent retreat. Stocks erased
more than $600 billion in value as financial shares in the S&P 500
decreased the most since at least 1989, according to data compiled by
Bloomberg.

``Fear is in charge,'' said Henry Herrmann, president and chief
executive officer of Waddell & Reed Financial Inc. in Overland Park,
Kansas, which manages $70 billion. ``This blows another hole in the
banking system's ability to extend credit.''

The S&P 500 declined 58.17 points, or 4.7 percent, to 1,193.53, the
lowest level since October 2005. The Dow Jones Industrial Average
tumbled 504.48, or 4.4 percent, to 10,917.51. The drop followed a slump
across Europe and Asia. The dollar weakened the most against the yen
since 1999 and two-year Treasury notes surged the most in seven years.

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