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AP Business NewsBrief at 5:55 p.m. EDT
(AP Online Via Acquire Media NewsEdge) Another nightmare on Wall Street: Dow down 450NEW YORK (AP) _ The stock market took another nosedive Wednesday as the American banking system appeared even shakier and investors worried that the financial crisis is spinning so far out of control that even government rescues can't stop it. The Dow Jones industrial average, which only two days earlier had suffered its steepest drop since the days after the Sept. 11 attacks, lost another 450 points. About $700 billion in investments vanished.
Stocks tumble after government bailout of AIGNEW YORK (AP) _ Wall Street plunged again in a crisis of confidence Wednesday as anxieties about the financial system still ran high after the government's bailout of insurer American International Group Inc. The Dow Jones industrial average dropped about 450 points, and investors seeking the safety of hard assets and government debt sent gold, oil and short-term Treasurys soaring. The market was more unnerved than comforted by news that the Federal Reserve is giving a two-year, $85 billion loan to AIG in exchange for a nearly 80 percent stake in the company, which lost billions in the risky business of insuring against bond defaults. Wall Street had feared that the conglomerate, which has its tentacles in various financial services industries around the world, would follow the investment bank Lehman Brothers Holdings Inc. into bankruptcy. The ramifications of the world's largest insurer going under likely would have far surpassed the demise of Lehman.
Shares of Morgan Stanley and Goldman Sachs plungeNEW YORK (AP) _ Shares of Goldman Sachs and Morgan Stanley plunged on Wednesday, a sign that investors fear they can't survive in their present form as the last two major independent investment banks. Executives of both companies insisted a day earlier, when they were reporting profits for the most recent quarter, that they do have the financial wherewithal to go it alone.
WaMu investor positions thrift for reprieveSAN FRANCISCO (AP) _ Ailing Washington Mutual Inc. moved into a better position to find a reprieve or rescue from its mounting loan problems Wednesday after a major investor removed a potential stumbling block to a sale or another infusion of capital. The concession by the private equity group TPG came as government regulators tried to arrange a sale of the nation's largest thrift, reflecting their worries about another possible bank failure that would drain the already depleted Federal Deposit Insurance Corp.
Housing construction plunges 6.2 pct. in AugustWASHINGTON (AP) _ Construction of new homes and apartments fell to the weakest pace in 17 years in August, far more than expected, but lower mortgage rates and tax credits have given builders some glimmer of hope of a possible rebound. Housing construction dropped a surprising 6.2 percent last month, the Commerce Department reported Wednesday, far larger than the 1.6 percent decline analysts had been expecting.
Will AIG plan cost taxpayers money, or just sleep?WASHINGTON (AP) _ American taxpayers awoke Wednesday to learn they may end up owning one of the world's largest insurers. They might now lose some sleep wondering whether the government's $85 billion loan to American International Group was a wise investment. If the gamble succeeds, the company nurses itself back to health, unhinged financial markets calm down and taxpayers turn a profit.
Barclays may acquire more of LehmanLONDON (AP) _ Barclays PLC said Wednesday it may pick up some of Lehman Brothers assets and employees in Europe and Asia, on top of the British bank's deal to acquire key U.S. operations from the failed investment bank. "Options, not obligations," Group Chief Executive John Varley said of the possibility of salvaging more of Lehman Brothers businesses.
Oil spikes $6 on safe-haven buying, weak dollarNEW YORK (AP) _ Oil prices shot up $6 a barrel Wednesday, rebounding as fears of a spreading crisis in the U.S. financial sector sent skittish investors scrambling out of stocks and into hard assets. The big rally at least temporarily halted crude's steep, two-month slide and brought prices back within striking distance of $100. Investors were frantically buying the same commodity that until this week they shunned in the belief that the slowing global economy was eroding demand for energy.
Gold prices post biggest 1-day gain everNEW YORK (AP) _ Gold prices exploded Wednesday _ posting the biggest one-day gain ever in dollar terms _ as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying. Gold for December delivery rose as much as $90.40, or 11.6 percent, to $870.90 an ounce in after-hours trading on the New York Mercantile Exchange after jumping $70 to settle at $850.50 in the regular session. That was the biggest one-day price jump ever; gold's previous single-day record was a $64 gain on Jan. 29, 1980. In percentage terms, it was gold's largest one-day advance since 1999.
Applications to refinance home mortgages surgeNEW YORK (AP) _ Homeowners rushed to take advantage of last week's drop in interest rates following the government's takeover of Fannie Mae and Freddie Mac, but rates are rising again on investor fears about the eroding conditions in financial markets. A mini-refinance boom started last Thursday but ended early Monday, said Pava Leyrer, president of Heritage National Mortgage in Michigan. The average rate on a 30-year, fixed rate mortgage was 6.14 percent on Wednesday, up from 6.02 percent last week after the government bailed out Fannie and Freddie, though still below last month's 6.65 percent, according to HSH Associates.
Copyright ? 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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