Stocks Forget Yesterday's Good Times

Updated from 12:06 a.m. EDT

Stocks on Wall Street were falling Tuesday, giving back the previous day's big gains as anxious traders dealt a substantial blow to Lehman Brothers (LEH Quote) shares.

The Dow Jones Industrial Average was recently down 59 points to 11,452, and the S&P 500 dropped 14 points to 1,253. The Nasdaq dropped 14 points to 2,256.

After Monday's close, a regulatory filing showed Michael Dell, CEO of PC maker Dell (DELL Quote), bought $100 million in the company's stock last week.

Ahead of the new day's trading, Dow Jones Newswires reported that South Korea Development Bank, which had been rumored ready to buy a stake in Lehman, has ended talks with the struggling brokerage. However, Bloomberg later reported that Korea's Financial Services Commission denied the report. Subsequently, Bloomberg reported that the talks between Lehman and KDB did in fact end.

Whatever really happened, Lehman is trading down some 30%.

"The financials are weak," said Ted Weisberg, floor trader at Seaport Securities. "I don't know if there's any specific news; I only know what I read in the paper." He said that much of the headline news concerning Lehman is conjecture and talk.

"There continues to be no tolerance for negative rhetoric, no matter what the source," said Weisberg. "Nothing seems to work, and whatever happens seems to have a 24-hour life cycle at best, and [then] we're back to the underlying trend, which seems to be neutral at best."

Market analysts' revisions on some stocks' ratings were reflecting the negative sentiment. Stifel Nicolaus downgraded banking companies TCF Financial (TCB Quote) and BB&T (BBT Quote) to hold from buy and to sell from hold, respectively. Wachovia (WB Quote) also took a hit from Merrill Lynch, which cut the bank to underperform from neutral.