Stocks tumbled today after fresh worries about the stability of investment bank Lehman Brothers touched off renewed jitters about the overall...

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NEW YORK — Stocks tumbled today after fresh worries about the stability of investment bank Lehman Brothers touched off renewed jitters about the overall financial sector.

The Dow Jones industrial average fell 280.01 to close at 11,230.73.

Broader indexes also fell. The Standard & Poor’s 500 index declined 43.28 to 1,224.51, and the Nasdaq composite index fell 59.95 to 2,209.81.

The declines ate into returns logged Monday when the Dow jumped nearly 290 points, the S&P 500 rose 25 points and the technology-heavy Nasdaq composite index added nearly 14 points.

Bond prices jumped as investors sought the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.58 percent from 3.68 percent late Monday.

Wall Street’s pullback comes a day after the biggest single-session rally in a month for the Dow, so some retrenchment might have been expected. But it was worries about Lehman that punctured a sense of optimism about the financials. Investors had been hopeful about the sector after the Treasury Department announced Sunday it would seize control of mortgage lenders Fannie Mae and Freddie Mac to stabilize the companies.

But worries about Lehman regained investors’ attention. The No. 4 U.S. investment bank fell $6.36, or 45 percent, to close at $7.79 as investors worried that the company was having trouble finding fresh sources of capital. Media reports said a possible investment from South Korea’s government-owned Korea Development Bank was in doubt.

Many financial companies, including Lehman, have struggled with souring mortgage debt on their books and have looked to outside sources of funding to shore up their balance sheets.

“We’re back to the fundamentals again,” said Denis Amato, chief investment officer at Ancora Advisors in Cleveland, referring to investors’ mentality a day after sending stocks higher on news of the move to aid Fannie Mae and Freddie Mac. “These financial maneuverings don’t create prosperity,” he said of the government’s moves. “Just because you make some financial change doesn’t mean all of the sudden the economy gets better.”

Oil closed below $104 a barrel for the first time since early April after Hurricane Ike appeared to be headed away from energy installations in the Gulf Coast. In Vienna, OPEC’s president signaled the cartel wouldn’t cut production. Light, sweet crude fell $3.08 to settle at $103.26.

The dollar was mixed against other major currencies, while gold prices fell.

A weaker-than-expected report on pending U.S. home sales likely added to Wall Street’s downbeat mood. The National Association of Realtors said its seasonally adjusted index of pending sales for existing homes fell 3.2 percent to 86.5 from an upwardly revised June reading of 89.4. The index was 6.8 percent below year-ago levels, and missed projections for a reading of 88.6.

Worries about Lehman weighed on the entire financial sector. Lehman shares hit their lowest since the collapse of hedge fund Long-Term Capital Management in 1998.

“It’s really spooking the market,” said Jim Herrick, manager of equity trading at Baird & Co. “Once rumors came out that talks had broken down it caused stocks to have this massive sell-off.”

“They don’t want another run on the bank,” he said.

Investors are worried that Lehman could suffer the same fate as Bear Stearns, which J.P. Morgan Chase bought after Bear’s near collapse in March.

The pessimism comes a day after investors greeted the government’s plan to take over Fannie Mae and Freddie Mac with a burst of enthusiasm. Investors had been worried that the companies, which hold or back about half the nation’s mortgage debt, would succumb to a spike in bad loans. Fannie Mae rose 26 cents, or 35.6 percent, to 99 cents, while Freddie Mac ended unchanged at 88 cents after advancing as high as $1.17 during the session.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where volume came to 1.19 billion shares.

Overseas, Japan’s Nikkei stock average fell 1.2 percent. Britain’s FTSE 100 fell 0.6 percent, Germany’s DAX index fell 0.48 percent, and France’s CAC-40 declined 1.1 percent.

Russian stock markets fell sharply today, weighed down by concerns over oil profits following a continuing slide in prices for crude and reports that the Kremlin might not support tax cuts for the industry.

The dollar-denominated Micex index tumbled 9.1 percent, bringing it to a low of 40 percent below its May high. The ruble-denominated benchmark RTS — which dropped 7.5 percent today — has fallen 44 percent in the same period.

Investor sentiment toward Russia has suffered in the wake of high-profile corporate conflicts, and Prime Minister Vladimir Putin’s public attack on steelmaker Mechel in July. Russia’s conflict with Georgia and resulting tension with the United States and Europe persuaded many portfolio investors to turn to safer markets.