Markets in Europe and Asia tumbled Tuesday as the bankruptcy of Lehman Brothers and the tight-wire act of American International Group stoked fears.

U.S. markets, however, bounced out of and into positive territory at mid-day as rumors emerged that Washington was poised to provide aid to AIG, the world’s largest insurance company whose exposure to mortgage-backed securities put it on the verge of collapse.

Japan’s Nikkei Average closed down 5 percent, to 11,609 as several Japanese banks acknowledged that they had exposure to Lehman Brothers. Meanwhile, Hong Kong’s Hang Seng index lost 5.4 percent to 18,300 and the Seoul Composite took an even bigger hit, losing 6.1 percent to 1,388.

In U.S. markets, the Dow Jones Industrial Average edged up 38 points, or .3 percent, to 10,955. The Nasdaq Composite added .3 percent to 2,186.

U.S. technology companies were mixed after being dragged down in Monday’s 500-point loss by the Dow. Google gained $4.54, or 1.1 percent, to $438.40, but Microsoft dropped $.84, or 3.2 percent, to $25.94. Computer makers took a drubbing as Apple fell $2.85, or $2 percent, to $137.51 and Dell tumbled $1.75, or 9.7 percent to $16.24.

After bailing out Fannie Mae and Freddie Mac earlier this month and arranging a takeover of investment bank Bear Stearns in March by JP Morgan Chase, Washington declined to intercede as Lehman Brothers collapsed over the weekend.

Investors also awaited moves by the Federal Reserve, which was scheduled to meet Tuesday afternoon.

Should AIG unravel, the impact on global financial markets remained unclear. The company’s shares remained under intense pressure, falling $2.29, or 48 percent, to $2.47.

Turmoil in the United States also roiled markets in Europe as banking giants like the UK’s Barclays came under pressure.

Near the close of trading, the UK’s FTSE 100 skidded 2.4 percent to 5,081, the German DAX lost 1.2 percent to 5,990 and the French CAC 40 slid .8 percent to 4,125.

To contain the damage, central bankers from Tokyo to Washington injected funds into banking systems in a bid to ensure that markets remained liquid.

On Monday, New York State insurance regulators allowed AIG to use $20 billion of its subsidiaries’ assets as a short-term lifeline.