Finance News

Individual European governments issued a cascade of deposit guarantees to shore up their banks but fell short of any coordinated action Monday to deal with the crisis sweeping financial markets, even as stock markets crashed and the euro sank to its lowest level for over a year.

Oil prices plunged below $90 a barrel Monday, coming within reach of year-ago levels as a widening financial maelstrom spreads overseas and crimps global demand for energy.

European Central Bank President Jean-Claude Trichet called Monday for calm in the continent's jittery markets, saying they are overestimating risks and the euro-zone central bank stood ready to provide all the liquidity needed for as long as necessary.

Bank of America Corp. on Monday reported third-quarter results earlier than planned, revealing a wider-than-expected profit drop and plans to boost capital by selling $10 billion stock and halving its dividend.

The jammed credit markets barely budged Monday as governments around the world scrambled to prop up their failing banks and investors waited for details on how, exactly, the Treasury will go about buying $700 billion of U.S. banks' mortgage assets.

Commodities prices tumbled broadly Monday on growing expectations that the financial crisis pummeling world markets will dramatically reduce global demand for energy and raw materials. Gold prices shot up as investors' faith in stock markets dimmed further, touching off a desperate dash for safe alternative investments.

The now-bankrupt investment bank Lehman Brothers arranged millions in bonuses for fired executives as it pleaded for a federal lifeline, lawmakers learned Monday, as Congress began investigating what went so wrong on Wall Street to prompt a $700 billion government bailout.

Wachovia, Citigroup and Wells Fargo on Monday agreed to a standstill of all formal litigation activity — a sign that the banks and the Federal Reserve are working feverishly to reach an agreement over the fate of Wachovia.

The government's $700 billion rescue, aimed at rebuilding economic confidence, appeared to sound a global alarm instead on Monday, triggering a fearful international sell-off as the U.S. began work on a plan that investors feared would be too little and too late to stave off a worldwide recession.

The Federal Reserve has granted approval for Japan's largest bank to purchase a stake in U.S. investment giant Morgan Stanley.

Bank of America Corp, citing "recessionary conditions," on Monday halved its dividend and said it would sell at least $10 billion in new common stock to bolster its capital to offset rising loan losses.

Stocks slid for a fourth straight day on Monday, leaving the Dow below 10,000 for the first time in four years, on fears the global economy was hurtling into recession despite government efforts to contain the fast-spreading financial crisis.

Governments around the world scrambled for new measures to contain the fast-spreading credit crisis as stock, bond and commodity markets bet on deepening uncertainty and a sharp downturn.

Oil dropped more than 6 percent to below $88 a barrel on Monday as a global market rout churned concerns that faltering fuel demand could slow further.

Washington policy-makers had no choice but to rescue American International Group Inc after a dramatic investor crisis left the giant insurer starved for cash, New York insurance chief Eric Dinallo told lawmakers on Tuesday.

Richard Fuld, the disgraced head of Lehman Brothers , said he would wonder "until they put me in the ground" why the U.S. government did not rescue the 158-year-old Wall Street firm and claimed regulators knew the full scale of its condition far before its collapse.

A recent change in U.S. tax rules that determine how a buyer treats a target bank's losses on loans and bad debts could spur more deals in the troubled sector.

Large U.S. asset managers with strong fixed-income records, such as BlackRock Inc , PIMCO and Trust Company of the West, are seen as favored to oversee the U.S. government's $700 billion financial rescue fund.

The U.S. Treasury Department and the Federal Reserve are considering additional steps to support strained commercial paper markets, a source familiar with the discussions said on Monday.

Wells Fargo & Co and Citigroup Inc agreed on Monday to a 44-hour truce in their fight over regional bank Wachovia Corp after a weekend of legal wrangling.