AIG falls 70% on Dow Jones

New York stock markets have opened with muted drops, but insurance giant AIG fell almost 70 per cent.

Today AIG confirmed it had organised a $20 billion bridging loan needed to keep it running, but by 15:00 BST – half an hour into trading – the insurance giant's stock fell 51.68 per cent, making up an initial slump.

Its stock price is now at $2.31 – compared to a 52-week high of $70.13.

The Dow Jones, however, managed to maintain some cool after the collapse of Lehman Brothers and was down just 0.72 per cent. Gains were limited but the next greatest falls came from Citi Group – down 6.17 per cent.

In London, the FTSE 100 saw itself fall to lows not seen since June 2005, as the index fell below 5,000.

At 14:45 BST the index stood at 5,003.30 down 3.86 per cent.

London was hit by growing fears of further financial losses – either latent or connected to the failure of Lehmans – leaving HBOS dropping 31.35 per cent.

Traders in London looked to the stability of utility firms in the hubbub, with Centrica, National Grid, Severn Trent and Cable & Wireless making gains.

As the need for a drink grew, Enterprise Inns rose 5.16 per cent.