By Kristina Cooke NEW YORK (Reuters) - U.S. stocks fell for a second day on Tuesday after a report that Lehman Brothers may have to raise more capital compounded recent worries the financial sector faces another round of big losses from the credit crisis. Major indexes managed to finish the day well off their lows after Lehman denied rumors it had borrowed directly from the Federal Reserve. Fears over financial shares contributed to a big move out of stocks and into safe-haven government bonds. The Wall Street Journal reported Lehman Brothers was considering raising as much as $4 billion. Lehman ended down 9.4 percent, having earlier fallen to their lowest level since the meltdown of Bear Stearns in March. "People are very leery of not having to go through another Bear Stearns-type situation with Lehman Brothers," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles. "It's a fear factor thing. There may be nothing behind it, but there's a sell now, ask questions later mentality." The Dow Jones industrial average fell 100.97 points, or 0.81 percent, to close at 12,402.85. The Standard & Poor's 500 Index slipped 8.02 points, or 0.58 percent, at 1,377.65, while the Nasdaq Composite Index was down 11.05 points, or 0.44 percent, at 2,480.48. The S&P financials sub-index ended at its lowest level since March 17, the day when the S&P 500 hit a 2008 low. Lehman fell $3.22 to $30.65. Goldman Sachs Morgan Stanley and Merrill Lynch shares all fell more than 1 percent. The nervous mood was exacerbated in early afternoon when Tyson Foods said it was eradicating chicken flock exposed to a mild strain of bird flu. Shares of Tyson, the biggest U.S. producer of chicken, beef and pork, fell 8 percent to $16.98. Shares of General Motors erased earlier gains to end down 0.8 percent at $17.58, after the automaker said its U.S. auto sales fell 30 percent in May. Earlier, GM shares had risen as much as 4 percent after it announced a reorganization plan. Stocks had risen in early trading, after a factory orders report brightened the view of the U.S. manufacturing sector and after Federal Reserve Chairman Ben Bernanke said U.S. interest rates were at the right level for an economy facing both price pressures and threats to growth. The dollar rallied after Bernanke spoke, which triggered a fall in the price of oil of around 3 percent, helping energy-sensitive sectors like airlines. An airline index rose 2.9 percent. Toll Brothers, the largest U.S. luxury home builder, led the Dow Jones homebuilders index 3.8 percent higher after it posted a smaller-than-expected loss. Its shares rose 3.1 percent to $21.60. Trading was moderate on the New York Stock Exchange, with about 1.3 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq about 2.16 billion shares traded, also short of last year's daily average of 2.17 billion. Declining stocks outnumbered advancing ones by 3 to 2 on the NYSE and by 4 to 3 on the Nasdaq. | 
