Stocks declined Monday, led by financials, as investors waited for some resolution on Fannie Mae, Freddie Mac and Lehman Brothers following rampant speculation last week.
"It still is about the financials," Steve Grasso, a broker for Stuart Frankel, told CNBC. "There's absolutely nothing that's attractive about this whole sector going forward in the near term."
But let the investor beware: Light end-of-summer volume can burn you like too much time on the beach without sunscreen.
"If you have no volume, this market's going to move around like a paper airplane," Grasso said, explaining that a trader could be up 10 percent, then down 10 percent within 1-2 days in a market like this.
All three major indexes -- the Dow Jones Industrial Average, the S&P 500 and the Nasdaq — were all down nearly 2 percent.
AIG hit a 13-year low and was the biggest drag on the Dow after Credit Suisse cut its third-quarter estimate and price target for the insurer, citing hefty losses at the company's derivatives business.
Credit Suisse said, given AIG's credit-default swap portfolio, it's one of the most exposed to recent credit deterioration. And, Credit Suisse estimates that AIG is facing a $6.5 billion loss, more than twice the firm's prior estimate of $2.6 billion.
Among other Dow components, Caterpillar , an industrial conglomerate with heavy overseas exposure, tumbled amid worries that the U.S. slowdown is now spilling across the globe.
The International Monetary Fund trimmed its outlook for 2008-2009 world economic growth, taking 2008 down to 3.9 percent from last month's estimate of 4.1 percent, and 2009 down to 3.7 percent from 3.9 percent. The IMF left unchanged its forecast for U.S. growth of 1.3 percent this year but cut its 2009 U.S. forecast to 0.7 percent from 0.8 percent. The IMF's concerns were said to be high and volatile commodity prices as well as market turbulence through 2009.
More speculation about Lehman Brothers: Private-equity firm Kohlberg Kravis Roberts has a "high level of interest" in buying Lehman's crown jewel, the Neuberger & Berman money-management firm, CNBC has learned.