NEW YORK, Sept 15: The New York Stock Exchange plunged on Monday on the heels of European markets, responding to reports of the fall of another investment giant, Lehman Brothers, and faltering Merrill Lynch and AIG Financial group.

In New York the Dow Jones industrial average dropped more than 300 points in just under 10 minutes of trading, and the major European stock exchanges sank more than 4 per cent, in the first wave of investor reaction to some of the most dramatic developments in the history of high finance. The Dow was down 268 points, or 2.3 per cent, according to Wall Street Journal.

London’s FTSE-100 share index was down 3.37 per cent, the Paris CAC-40 index lost 4.47 per cent and Germany’s DAX 30 index of blue chips sagged 3.18 per cent.

The WSJ said that Asia’s biggest stock exchanges in Japan, Hong Kong and South Korea were closed for holidays, but India’s Sensex index tumbled 3.4 per cent, Taiwan’s benchmark indicator plummeted 4.1 per cent and Singapore dropped 3.2 per cent.

Investment analysts interviewed by Dawn on Monday morning said that the atmosphere stopped short of panic.

Lehman Brothers the 158-year-old investment bank, is in liquidation; Merrill Lynch, the premier brokerage, has been subsumed into rival Bank of America, one of the world’s largest insurance companies, American International Group, is in a dash to shore up confidence after its stock price dropped 50 per cent just after the open.

The broader Standard & Poor’s 500-stock index was down 2.2 per cent. Lehman shares lost 95 per cent of their value in the first trading session after the firm declared bankruptcy.

Yields on Treasury notes plummeted as investors scrambled to hide their cash in ultra-safe government notes. The dollar also weakened against several foreign currencies.

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