Dow falls 2.5 percent in second worst day of year

NEW YORK (CNNMoney.com) - Stocks tumbled Friday, resulting in the second worst day of 2008, after AIG's record loss added to worries about the financial sector and more weak economic news intensified fears about a recession.

According to early tallies, the Dow Jones industrial average lost about 315 points, or 2.5 percent. The broader Standard & Poor's 500 index lost 2.7 percent and the Nasdaq composite fell 2.6 percent.

Treasury prices rallied, sending yields higher, as investors sought safety in the comparatively safer haven of government debt, while the dollar held near a record low versus the euro. Oil prices dipped after topping all-time highs over $103 a barrel during the session. Gold prices jumped, too.

"It's a debacle today," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams. "There's just no good news out there."

–By CNNMoney.com's Alexandra Twin