German, Swiss markets decline amid crisis

Financial stocks led a decline on Germany's blue chip DAX 30 index in early trading Monday, as markets reacted to the financial crisis unfolding on Wall Street. Overall the index lost 2.7 percent.

The biggest DAX decliners included Deutsche Bank, down nearly 6 percent; Commerzbank, down 5 percent; and Deutsche Postbank down 5 percent. Insurer Allianz was down 4.6 percent, while the stock market operator itself, Deutsche Boerse, fell 4.5 percent.

Germany's midcap MDAX was also down 2.7 percent in morning trading, while the technology TecDAX dropped 2.6 percent.

The market's drop came amid new economic uncertainty on Wall Street, with the 158-year-old Lehman Brothers Holdings Inc. saying Monday it intends to file for Chapter 11 bankruptcy. The company was crippled by $60 billion in soured real-estate holdings and unable to find an investment partner to throw it a lifeline.

Meanwhile, a government-brokered takeover saw investment bank Merrill Lynch taken over by the Bank of America for $50 billion, while a forced restructuring of the world's largest insurance company, American International Group Inc., also weighed heavily on global markets as the effects of the 14-month-old credit crisis intensified.

Shares in Switzerland saw similar declines. The country's two biggest banks fell sharply with UBS down more than 7 percent and Credit Suisse down 5.5 percent. Reinsurer Swiss RE fell more than 5 percent in early trading Monday.

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