U.S. stocks tumbled as a 45 percent drop in Lehman Brothers Holdings Inc. shook the banking industry, and oil’s plunge to a five-month low pushed energy companies down by the most in six years.

The Standard & Poor’s 500 Index slumped 3.4 percent, its biggest drop since February 2007, a day after the government’s bailout of Fannie Mae and Freddie Mac sparked the biggest rally in a month. Lehman led financial shares to their steepest drop since July after talks to sell a stake to Korea Development Bank broke down.

The S&P 500 decreased 43.28 points to 1,224.51. The Dow Jones average lost 280.01 to 11,230.73. The Nasdaq Composite Index sank 59.95, or 2.6 percent, to 2,209.81. About 10 stocks dropped for each that rose on the New York Stock Exchange.

Tags: dow jones , lehman , nasdaq , s&p 500