Michael Patterson and Adria Cimino
Monday, Sept 29, 2008
Stocks around the world tumbled, the euro and the pound plunged and bonds rose as governments raced to prop up banks.
Europe’s Dow Jones Stoxx 600 Index declined 3.2 percent and the MSCI Asia Pacific Index lost 2.7 percent after Dexia SA sank the most since it began trading 12 years ago and ICICI Bank Ltd. retreated to a two-year low. Futures on the Standard & Poor’s 500 Index fell 1.7 percent as Wachovia Corp. tumbled 91 percent. Citigroup Inc. agreed to buy the company’s banking operations in a transaction the Federal Deposit Insurance Corp. helped arrange.
The British pound dropped the most against the dollar in 15 years and the euro weakened after European governments stepped in to rescue Bradford & Bingley Plc, Fortis, and Hypo Real Estate Holding AG. The cost of borrowing in euros for three months soared to a record as banks hoarded cash. Commodities fell, led by oil, copper and lead. Investors fled to the safest securities, sending yields on U.S. government notes lower for a second day and European two-year note yields to the lowest in 5 1/2 months.
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“This credit crisis is pretty deep and it’s pretty deep throughout the financial industry,” Jason Pride, director of research at Haverford Trust Co., which oversees about $6.5 billion in Radnor, Pennsylvania, said in a Bloomberg Television interview.
The MSCI World Index of 23 developed countries lost 1.8 percent to 1,227.75 at 9:14 a.m. New York time, the biggest decline since Sept. 17, the day before the U.S. bank bailout plan sparked the index’s steepest two-day rally in 38 years. The MSCI Emerging Markets Index dropped 3.9 percent as India’s Sensitive index tumbled 3.9 percent and Russia’s Micex Index lost 5 percent.
This article was posted: Monday, September 29, 2008 at 12:01 pm