U.S., foreign stocks plunge as financial problems spread

• The German government is guaranteeing credit that lenders are extending to liquidity-stressed Hypo Real Estate Holding, a Munich-based bank and property conglomerate.

Europe's big nations last week had rebuffed urgings from U.S. Treasury Secretary Henry Paulson to set up their own bailout plans similar to the $700 billion rescue effort Congress is to take up starting Monday.

German Finance Minister Peer Steinbrueck said last week that the year-old global financial crunch was a U.S. problem that it needed to solve. Europe's other big industrial democracies — Britain, France and Italy — agreed, he said.

However, British Prime Minister Gordon Brown hasn't ruled out following suit if the situation worsens.

Until investors know where banks stand, Chambers said, European markets will remain volatile."It will be shooting up one minute and down the next," he said. "There's going to be violent mood swings."

Contributing: Jeffrey Stinson reported from London; Paul Wiseman reported from Hong Kong; Associated Press, Reuters

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