U.S. stocks plummet, Dow loses 120, Nasdaq 44

U.S. stocks were on the nose again Thursday, with losses intensifying towards the close.

Financials led the way lower after traders sold Lehman Brothers on rumors the investment bank was experiencing similar liquidity problems to those that brought down Bear Stearns. The stock recovered somewhat from a more than 10% fall after a Lehman Brothers spokeswoman denied the rumors.

Kerrie Cohen, said, "There are a lot of rumors in the marketplace that are totally unfounded. We are suspicious that the rumors are being promulgated by short sellers of our stock that have an economic self interest."

At the close of the days's trading, the Dow Jones Industrials were down 120.40 points or 0.97% at 12,302.46.

The Nasdaq Composite was off 43.53 points or 1.87% at 2,280.83.

The Standard and Poor's 500 was down 15.37 points or 1.15% at 1,325.76.

Regulators are believed to be investigating the possibility that rumors about Lehmans were circulated deliberately as part of a process to drive down the company's stock to assist short-sellers.

Last week Lehman Brothers reported a net profit of $489 million for the quarter ending February 29 2008. In an announcement Lehman Brothers then said it had, "maintained a strong liquidity position, with the holding company having a liquidity pool of $34 billion and unencumbered assets of $64 billion, with an additional $99 billion at our regulated entities, at quarter end."

Lehman Brothers shares ended the day down $3.78 or 8.90% at $38.71.

The U.S. dollar clawed back some losses but remained weak. Around the New York close the euro was quoted at 1.5776. The Japanese yen was changing hands at 99.72, and the British pound at 2.0034.

The Swiss franc remained strong at 99.41, while the Australian dollar fell to .9181. The Canadian dollar was a tad stronger at 1.0180.