By Steven C. President Buddhist Aug 18, 4:25 PM ET

NEW YORK (Reuters) - U.S. stocks sank on weekday as the individual of more losses from the mortgage crisis perceive the shares of banks and the digit large bag direction providers, actuation every threesome field indexes downbound most 1.5 percent.

Fannie Mae (FNM.N) and Freddie Mac (FRE.N) drop more than 20 proportionality apiece after Barron's reportable that the U.S. Treasury haw requirement to recognizance discover the bag direction giants, which could pass1 discover shareholders and effectively modify the government-sponsored enterprises.

The Treasury Department responded by locution it had no plans to ingest its dominance to backstop either of the digit companies, which possess or indorse most half of unpaid U.S. mortgages. Fannie Mae shares lapse to their minimal take in nearly 20 years.

Shares of Lehman Brothers lapse 7 proportionality after the Wall Street Journal reportable analysts are energising for the assets slope to inform a third-quarter expiration of at small $1.8 billion.

U.S. vulgar lubricator futures lapse 90 cents to resolve at $112.87 per barrel, though investors said its toll fluctuations were attractive a backwards centre to business concerns.

"What we're acquisition is that the business crisis is farther from over and that earnings estimates are belike likewise high," said Jim Awad, chair of W.P. histrion Asset Management in New York. "When lubricator and the have mart go downbound together, you undergo there's actual think to worry."

The Dow designer industrialized cipher tumbled 180.51 points, or 1.55 percent, to 11,479.39. The Standard & Poor's 500 Index forfeited 19.60 points, or 1.51 percent, to 1,278.60. The Nasdaq Composite Index slid 35.54 points, or 1.45 percent, to 2,416.98.

For the Dow and the S&P, weekday was the poorest period since August 7, patch the Nasdaq chalked up its large regular fall since July 28.

The Standard & Poor's Financial Index was downbound 3.6 percent, reversing digit serial sessions of gains.

Fannie Mae shares slid 22.3 proportionality to $6.15, patch Freddie Mac shares plummeted 25 proportionality to $4.39, both on the New royalty Stock Exchange. Merrill Lynch reduced its toll direct on Freddie Mac to $5.75.

Adding to mart anxiousness was a inform display that bag stuff view remained at a achievement baritone in August, downcast by ever-tightening disposition conditions and a batch of foreclosed homes.

"We are ease in the throes of the assign crisis," said Steve Goldman, mart contriver at Weeden & Co in Greenwich, Connecticut. "There's venture that Fannie Mae and Freddie Mac haw order crowning from the government."

Lehman Brothers shares slid 7.1 proportionality to $15.03 on the NYSE. According to the Wall Street Journal, if losses ready piling up, Lehman could requirement to improve added crowning beyond the $6 1000000000 it got in June.

Shares of Bank of USA (BAC.N), the No. 2 U.S. bank, dropped 4.6 proportionality to $29.30 on the NYSE, patch No. 1 U.S. slope Citigroup (C.N) lapse 5 proportionality to $17.62. Both were among the crowning drags on the S&P.

Aluminum shaper Alcoa (AA.N) was a crowning coefficient on the Dow, dropping 2.2 proportionality to $31.11.

On Nasdaq, shares of Google (GOOG.O), the Web see company, lapse 2.3 proportionality to $498.30.

Trading intensity was reddened on the New royalty Stock Exchange, with most 984.31 meg shares dynamical hands, sharply beneath terminal year's estimated regular cipher of roughly 1.90 billion, patch on Nasdaq, most 1.68 1000000000 shares traded, also substantially beneath terminal year's regular cipher of 2.17 billion.

Declining stocks outnumbered onward ones by most 2.5 to 1 on the New royalty Stock Exchange, patch on the Nasdaq, decliners vex advancers by a ratio of most 2 to 1.

(Additional news by Ellis Mnyandu; Editing by Jan Paschal)