While U Slept: Biz&Buz. The 5 Big Overnight Business Stories. Tuesday, 05/25/10

GLOBAL MARKETS CONTINUE TO TANK European exchanges open with 2 to 3 percent drops after similar closing losses in Asia.  In London, the FTSE 100 has fallen by more than 10% in past month after hitting a 22-month high in April. Joining Eurozone doubts are worries over showdown between North and South Korea. (BBC)

SEOUL AT LOWEST CLOSE IN 15 WEEKS AS NORTH KOREAN TENSIONS RISE Shares on South Korean exchange fall 2.8 percent after government says it will cut off trade with the North after findings on ship sinking. (Reuters)

MORGAN STANLEY BUYS $1 BILLION IN LEHMAN CLAIMS FROM FRENCH HOLDING US bank acquires one of biggest bundles in claims of defunct investment bank from French banking firms Credit Industriel et Commercial and Banque Federative du Credit Mutuel. (Bloomberg)

COMMERCIAL REAL ESTATE DEFAULT RATE AT HIGHEST LEVELS SINCE 1992 Default rate for bank-held commercial mortgages hits highest level since at least 1992 and is expected to peak in 2011, according to a Real Capital Analytics study. (NYT)

WAL-MART SLASHES I-PHONE TO $97 Beginning Tuesday, world’s largest retailer will sell Apple’s 16GB 3GS iPhone for less than 100 bucks, as Apple sets to launch new model next month. (MoneyCNN)