LEHMAN BOTHERS - NEW RUMOR DRAWS FRESH BLOOD FROM STREET STALWART

Shares plunged as much as 23 percent in early trading, falling to their lowest level in eight years, amid rumors the giant bond manager Pacific Investment Management and the $16 billion hedge fund SAC Capital were pulling business from the firm. If true, the news could have rung the death knell for the 158-year-old company.

Both firms publicly denied the talk, and the stock pared its losses but still ended down 12 percent, or $2.44, to $17.30 in New York Stock Exchange trading. The punishing plunge was reminiscent of the precipitous decline of now-defunct Bear Stearns.