Stocks fall in U.S., Europe
— -- U.S. stocks fell moderately at the opening bell Monday, then got worse, after the stunning reshaping of the Wall Street landscape. The Dow Jones industrials opened down less than 100 points, was soon was off nearly 300 and later was off about 200.
Investors must absorb the bankruptcy filing at Lehman Brothers and Merrill Lynch's forced sale to Bank of America for $50 billion in stock. And perhaps most ominously, American International Group is reportedly asking the Federal Reserve for emergency funding. The world's largest insurance company plans to announce a major restructuring Monday.
The swift developments are the biggest yet in the 14-month-old credit crises that stems from now toxic subprime mortgage debt.
Broader stock indicators also fell in the U.S.
A sharp drop in oil below $100 also weighed on energy names, including Dow components ExxonMobil and Chevron.
Global stocks fared much worse as a feverish sell-off in Europe and Asia turned markets sharply lower.
The FTSE-100 share index was down 4.07% in London, the Paris CAC-40 was off 4.5% and Germany's DAX 30 index of blue chips sagged 3.23%.
The falls were led by insurance and financial stocks.
"We will have a shakeout today and there will probably be more damage in the afternoon when the U.S. gets going," said Stephen Pope, chief global market strategist at Cantor Fitzgerald Europe in London.
Europe's major central banks moved quickly to calm markets Monday, pumping billions of euros and pounds into the financial system. The European Central Bank loaned 30 billion euros but said it received 51 bids for 90.3 billion euros on its one-day tender with a bid rate of 4.25% — a clear sign that demand for cash is over the top.
Similarly, the Bank of England offered up 5 billion pounds in a three-day auction — but bids were nearly five times higher, at 24.1 billion pounds.
The Swiss National Bank said it was also providing liquidity in "a generous and flexible manner" at an overnight rate of 1.9%, but wouldn't say how much was on offer.
