The continuing turmoil in the financial markets has caused the New York to have its worst day since the 2001 terrorist attacks. The Dow Jones Industrial average dropped 504.48 points during the day. The S&P 500 index lost 4.7%. The biggest losers on the were banks and other financial institutions.
Europe, fared similarly with the Flagship FTSE off nearly 4%.
Treasury secretary, Henry M. Paulson Jr., commented “as we work off some of the past excesses,” but that Americans could “remain confident in the soundness and the resilience of our financial system.”
“Let me step back a bit and provide a little perspective,” Mr. Paulson said. “As I’ve long said, the housing correction is at the root of the challenges facing our markets and our financial institutions. I believe that we’ve taken very important steps with respect to Fannie Mae and Freddie Mac, and they’re amongst the most important actions we can take to work through this turmoil.”
Lehman Brothers, led the way seeing their shares drop 95% to 21 cents, on the way to declaring bankruptcy. AIG dropped to $4.76 or 65%. A promise of help from the Federal Reserve helped matters.
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