Stocks today: Japan index falls near 26-year low

TOKYO -- Japanese shares tumbled Tuesday after a plunge on Wall Street overnight, but the sell-off eased as the government signaled it may move to prop up stock prices.

The benchmark Nikkei 225 stock average lost 1.5%, or 107.6 points, to 7,268.56. That's just above the 26-year low of 7,162 set on Oct. 27.

Worries that Citigroup and other U.S. banks will keep suffering severe losses sent U.S. stocks tumbling overnight amid pessimism about a quick economic recovery. The Obama administration tried to pacify fears, saying it would launch a revamped bank rescue program this week. But the Dow Jones and Standard & Poor's 500 indexes plummeted to their lowest closes since 1997.

Japanese financials dragged the market lower in the aftermath of Monday's bankruptcy of SFCG Co., a provider of high-interest loans to small businesses. Nomura Holdings slid 9.3% to 420 yen, and Daiwa Securities sank 5.8% to 358 yen.

Nomura was also weighed down by its announcement Monday after the market closed that it would sell 716.4 million shares. The massive financial firm, which needs to shore up its books after losses and the pricey acquisition of parts of failed U.S. brokerage Lehman Brothers, said earlier this month it planned to raise up to 300 billion yen ($3.2 billion) through the share issue.

The market got some support after Finance Minister Kaoru Yosano said the government was mulling taking steps to shore up the market, including buying shares with public funds.

"Watching today's stock market, I think we will have to consider various options," he told reporters.

Several well-known exporters managed strong gains as they got a boost from the weakening yen, which increases profits on goods sold overseas. Toyota rose 2% to 3,090 yen, while Honda gained 2.6% to 2,215 yen. Sony ended up 0.4% at 1,555 yen.

In foreign exchange, the dollar was trading at 95.11 yen versus 93.04 yen Monday, while the euro was at $1.2735 from $1.2975.