Renewed worries that the government will need to bailout mortgage giants Fannie Mae and Freddie Mac caused a selling deluge in financial stocks and helped shove the Dow 180 points into the red on Monday. 

Today's Market

The Dow Jones Industrial Average fell 180.51 points, or 1.55% to 11479.39, the Standard & Poor’s 500 index dropped 19.60 points, or 1.51%, to 1278.60 and the Nasdaq Composite lost 35.54 points, or 1.45%, to 2416.98. The FOX 50 fell 12.18 points, or 1.31%, to 917.18.

Wall Street found little reason to buy stocks on Monday as the stock market was in the red for nearly the entire trading session. The specter of the nationalization of Fannie Mae (FNM) and Freddie Mac (FRE) -- a move that would likely wipe out common stock owners and an idea that was raised again in a high-profile story in Barron’s over the weekend -- caused financial fears to rock the market once again.

Worries that the government would be “willing to throw the equity holders to the wolves…has basically put the fear of God into everybody that is long on financial stocks,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business. “There is always another shoe to drop and [the Barron's story] just reminds everybody that these problems for the financial stocks just don’t seem to go away.”

One of the only positive spins for the Monday selloff is that it came on very low volume, potentially indicating a lack of conviction. Under 1 billion shares exchanged hands on the NYSE, much fewer than the 1.3 billion that are typically traded.

All 30 components of the Dow closed in the red on Monday. General Motors (GM) and insurer AIG (AIG) suffered the worst losses among the blue chips on Monday, falling 7% and 6% respectively. Financial giants Bank of America (BAC) and Citigroup (C) didn't fare much better, posting sharp declines. 

Overshadowing another decline in crude oil prices were the financial stocks, which closed down 3.75% on Monday. Fannie and Freddie plunged almost 25% a piece after Barron's that their troubled balance sheets will force the government to sweep in and recapitalize them. Shares of the companies, which own or back more than $5 trillion of U.S. mortgages, have plummeted almost 90% over the past year. 

The Treasury Department said it has no plans to enact the backstop plan that was put into place earlier this summer and Freddie Mac spokesman Michael Cosgrove told FOX Business: “We continue to have access to global capital markets." 

Also, Merrill Lynch lowered its price target on Freddie to $5.75 from $7, citing the struggles the company faces by trying to please regulators, the Treasury and shareholders -- a trio often with competing interests. Merrill also predicted the company will likely try to raise capital during the current quarter that will consist of at least 50% common equity. 

“If you really take a hard look at it, the market is kind of on thin ice lately. If they do have to raise [money], it’s going to be pretty expensive money," said Anthony Conroy, head trader at ConvergEx.

The day's earnings news was headlined by Lowe's (LOW), which reported a better-than-expected 8% slide in second-quarter. The second-largest home improvement retailer in the U.S. earned 64 cents a share, solidly beating the consensus estimate of 56 cents a share, according to data provided by Thomson Reuters. Looking ahead, Lowe's issued a third-quarter profit outlook below analyst estimates but boosted its full-year forecast.  

The sliding price of crude oil, which has fallen 9% over the past two weeks, wasn't able to stimulate a rally on Wall Street on Monday. Crude closed down 90 cents at $112.87 a barrel, erasing earlier gains of nearly $2. The energy market wasn't spooked by Tropical Storm Fay in the Gulf of Mexico, a storm that forced some evacuations from Royal Dutch Shell (RDS). 

The day's losses come after the major indexes had a mixed performance last week. While the blue chips closed with modest losses, the Nasdaq Composite extended its weekly win streak to five -- the longest such streak since October 2007, according to Dow Jones. The S&P 500 also ended higher for the fourth time out of the past five weeks. 

Corporate Movers

Lehman Brothers (LEH) could be looking at a quarterly loss in upwards of $1.8 billion when it reports results next month, according to a report in The Wall Street Journal. Another quarterly loss for the struggling investment bank may force it to raise further capital on top of the $6 billion it raised in June, the Journal reported. Lehman has reportedly entertained numerous plans to improve its balance sheet, including selling real estate assets or putting its asset management unit up for sale. Lehman shares have fallen more than 75% this year, compared with the S&P 500's 11.6% slide. 

General Motors (GM) was again the worst-performing stock on the Dow as the automaker will reportedly offer employee-level pricing on nearly 90% of its 2008 Chevrolet inventory beginning Sept. 2. The incentives will include some 2009 models and also cash back on slower-selling trucks, Reuters reported. 

Electronic Arts (ERTS), the publisher of the "Madden NFL" video game series, allowed its $2 billion buyout offer for Take-Two Electronics (TTWO) to expire on Monday. Take-Two, which makes the controversial and profitable "Grand Theft Auto" series, and EA are still in private talks even in the wake of the failed $25.74-a-share deal. The news pushed Take-Two's shares down 5% on Monday. Take-Two has rejected five previous buyout bids as being too low. 

BHP Billiton (BHP) posted a 30% jump in second-half profit and increased its dividend by 52%. For the year, the Aussie mining giant earned $15.39 billion, in-line with what analysts had been forecasting. The results come as BHP attempts a $127 billion hostile takeover of Rio Tinto (RTP), a deal that if completed would be the second-biggest buyout ever. 

Hershey (HSY) slid 10% after the chocolate maker warned it will likely miss its own guidance for full-year earnings thanks to higher costs. Citigroup downgraded the stock to "hold" from "buy" as Hershey also raised prices by about 10% on Friday.