U.S. Stocks Sink at Open
Updated from 8:58 a.m. EDT
U.S. stocks sold off at the open Monday, as it became apparent that the credit crisis had spread beyond America into Europe and Asia.
The Dow Jones Industrial Average fell 209 points to 10,115, and the S&P 500 gave back 26 points to 1073. The Nasdaq dropped 53 points to 1895.
In a sign of a global financial crunch, leaders from France, Germany, Italy and the U.K. met Saturday and agreed to coordinate efforts to prevent failures in Europe's financial system.A scramble ensued to help troubled institutions. Germany rescued lending company Hypo Real Estate, and France's BNP Paribas said it would take over Benelux bank Fortis NV. Germany's chancellor, Angela Merkel, announced that Germany would guarantee all of its private bank deposits. On Monday, Denmark followed suit. Back in the U.S., Wells Fargo (WFC) said it intended to go ahead with its purchase of Wachovia (WB). Wells Fargo said an appeals court vacated a ruling that extended an exclusivity agreement between Citigroup (C) and Wachovia. On Monday, analysts at both Keefe Bruyette and Friedman Billings upgraded Wells Fargo to market perform from underperform. Meanwhile, The Wall Street Journal said that Treasury Secretary Henry Paulson would appoint adviser Neel Kashkari to supervise the $700 billion bailout program for the financial system. Paulson's proposal passed the House of Representatives and was signed by President Bush on Friday. Bank of America (BAC) announced it would modify about 400,000 mortgages to help borrowers who had taken out loans from Countrywide Financial, which BofA acquired on July 1. Insurance company Hartford Financial (HIG) said it garnered a $2.5 billion investment from Allianz, is reducing its dividend and will register a third-quarter loss.
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