Global equities plunge; save-haven bonds rise

Global stocks and crude oil prices fell sharply on Monday after Lehman Brothers Holdings Inc's filing for bankruptcy protection made investors flee risky assets and flock to the safety of government debt.
Shares of financial services companies plunged when U.S. equity markets opened amid widespread concerns about the outlook for the economy and corporate profits. Such worries also led to perceptions that energy demand would slow further, bringing down oil prices.
Deep fears about the unfolding U.S. banking crisis drove up demand for U.S. Treasury bills and pushed down yields, which move in the opposite direction to prices, on an intense flight-to-safety bid into ultra-short-term government paper.
The 1-month Treasury bill yield fell to about 0.57 percent, its lowest level since April, from about 1.34 percent late on Friday.
"We are seeing cash temporarily moving into the U.S. dollar amid heightened uncertainty and market turmoil, despite the fact that much of the turmoil is centered here in the U.S. financial markets," said Michael Woolfolk, senior currency strategist at Bank of New York Mellon in New York.
Before 10 a.m, the Dow Jones industrial average was down 307.44 points, or 2.69 percent, at 11,114.55. The Standard & Poor's 500 Index was down 32.75 points, or 2.62 percent, at 1,218.95. The Nasdaq Composite Index was down 44.17 points, or 1.95 percent, at 2,217.10.
The yen rallied broadly, and the U.S. dollar rose as mounting risk aversion after Lehman Brothers' filing attracted safe-haven flows.
The U.S. dollar index, which measures the dollar's performance against a basket of currencies, was up 0.72 percent at 78.917. Against the yen, the dollar was down 2.07 percent at 105.69.
The euro was down 0.27 percent at $1.4189.
Oil plunged as much as $7 per barrel as investors sought safer havens and on early signs that Hurricane Ike had spared key U.S. energy infrastructure along the Gulf of Mexico.
U.S. light sweet crude oil fell $4.97 to $96.21 a barrel.
Gold was higher on safe haven buying, but bullion prices retreated from highs after oil prices fell. Platinum and palladium also slipped sharply as investors worried about the outlook for economic growth.
Spot gold prices rose $11.55 to $775.00 an ounce.
In the U.S. government debt market, the benchmark 10-year Treasury note rose 48/32 to yield at 3.53 percent. The 30-year U.S. Treasury bond rose 58/32 to yield 4.23 percent.
European stocks fell more than 4 percent, following tumbling equity markets in Asia. Stock indices in Australia, Singapore and Taiwan all dropped 3 percent to 4 percent, while Indian stocks fell 5 percent.
The FTSEurofirst 300 index of top European shares was down 4.4 percent at 1,111.51 points.
Lehman, weighed by losses spawned by the U.S. mortgage crisis, sought bankruptcy protection on Monday following a failed last-minute scramble to find a buyer over the weekend.
Adding to investor worries was a report that American International Group Inc, one of the world's largest insurers, had asked the Federal Reserve for a $40 billion bridge loan.
AIG shares fell almost 50 percent in volatile trade, off about $5.50 a share at $6.80 soon after trading opened on Wall Street.