Stocks tumbled worldwide, the dollar fell and US Treasuries surged after the bankruptcy of Lehman Brothers Holdings Inc drove investors to the safety of government debt.

Equities dropped in Europe and Asia, led by a 23 percent tumble in HBOS Plc and a 10 percent decline in Macquarie Group Ltd. Futures on the Standard & Poor's 500 Index fell 3.8 percent as American International Group Inc sank 47 percent. Russia's Micex Index declined 5 percent, leading a retreat in emerging markets.

Yields on two-year Treasury notes fell below 2 percent for the first time since April on speculation the Federal Reserve will need to lower interest rates to bolster financial institutions battered by $514 billion of credit losses and asset writedowns from the subprime-mortgage market's collapse. Gold rose 2 percent, while the dollar dropped the most in a decade against the yen and fell versus the euro, pound and Swiss franc.