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U.S. to Open Lower as Credit Crisis Spreads

The credit crisis had spread beyond America into Europe and Asia. Stocks fall hard overseas.

Premarket futures were pointing at a lower open of U.S. stocks Monday, as it became apparent that the credit crisis had spread beyond America into Europe and Asia.

Futures for the

S&P 500

were down 34 points at 1074 and were 30 short of fair value.


futures were 46 points lower at 1432 and were 51 below fair value.

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.

On Sunday, 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


Back in the U.S.,

Wells Fargo


said it intended to go ahead with its purchase of



. Wells Fargo said an appeals court vacated a ruling that extended an exclusivity agreement between



and Wachovia.


The Wall Street Journal

said that Treasury Secretary Henry Paulson would appoint advisor 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.

On Monday,

Bank of America


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.

Outside the financials,


reported that



agreed to a merger with

Eli Lilly



In the commodities space, the price of crude oil was down $3.81 to $90.07 a barrel, and gold was climbing $12.40 to $845.60 an ounce.

Longer-term U.S. Treasury securities were climbing in price. The 10-year was up 28/32 to yield 3.5%, and the 30-year was climbing 1-17/32, yielding 4%.

Overseas markets were broadly falling. The FTSE in London and the Dax in Frankfurt were each down more than 5.8%. Asian exchanges, including Japan's Nikkei and Hong Kong's Hang Seng, closed on the downside.