Financials down with Lehman, Nasdaq drops 2 pct

NEW YORK, Sept 9 - U.S. stocks tumbled further on Tuesday, with the Nasdaq Composite Index falling 2 percent as worries about Lehman Brothers' ability to raise much-needed cash battered the financial sector.

Another slide in the price of oil, which fell 3.8 percent to $102.55, weighed on energy shares.

Shares of Lehman, the fourth largest U.S. investment bank, fell 44 percent to $7.91 on the New York Stock Exchange.

Investors worried about Lehman's ability to raise capital to offset losses tied to mortgage investments after news that talks on a possible investment from Korean Development Bank had broken down.

The Dow Jones industrial average was down 198.18 points, or 1.72 percent, at 11,312.56. The Standard & Poor's 500 Index was down 33.95 points, or 2.68 percent, at 1,233.84. The Nasdaq Composite Index was down 48.00 points, or 2.11 percent, at 2,221.76.