Dow Dives More Than 500 Points On Whirlwind Of Financial Woes

New York, NY (AHN) - The markets opened Monday drastically lower on news of Lehman's chapter 11 filing, AIG's liquidity woes and the sale of Merrill Lynch to Bank of America. A brief morning rally took us off early lows, but selling resumed in the afternoon as all three major indices closed on lows.

The Dow Jones Industrial average fell a whopping 504 points or 4.42 percent. All 30 Dow components ended the session lower. None weighed on the index as heavy as American International Group, down 60 percent as liquidity issue swirl the insurance giant leaving investors to worry if they will remain in business.

The S&P 500 shed 59 points or 4.7 percent, the biggest one day drop since the first trading day following September 11, 2001. The index is now down 18.8 percent on the year and closed Monday at its lowest level since 2005.

The financials, which represent the second largest sector in the S&P 500, fell 10.4 percent on Monday. All 10 major economic sectors finished the session lower.

Tech sold off as well with the Nasdaq Composite falling 81 points or 3.6 percent. Large-cap tech did not fair any better, losing 3.5 percent on the session.

A sliding price of crude oil, usually a positive catalyst for the markets, had little effects. Some airline stocks did gain though. Oil closed below $100 a barrel for the first time since March, settled at $94.59, off $6.59 a barrel.

Tuesday's session will see the release of August Consumer Price Index (CPI) as well as a policy statement from the Federal Open Market Committee.