Stocks Plunge on Rising Credit Anxiety
And Bush is due to speak this morning. No doubt, he wants us to go shopping.
Wall Street plunged in early trading Thursday, yanking the Dow Jones industrials down nearly 200 points after a French bank said it was freezing three securities funds that struggled to find liquidity in the U.S. subprime mortgage market.
The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems. The idea that anyone - institutions, investors, companies, individuals - can’t get money when they need it unnerved a stock market that has suffered through weeks of intense volatility triggered by concerns about available credit.
A move by the European Central Bank to provide more cash to money markets intensified Wall Street’s angst - although the bank’s loan of more than $130 billion in overnight funds to banks at a bargain rate of 4 percent was intended to calm investors, Wall Street saw the step as confirmation of the credit markets’ problems.
The Federal Reserve followed suit, adding $12 billion to U.S. markets to help ease liquidity constraints, according to Dow Jones Newswires.
More at the AP
