The Hindu : Business : Wall Street falls in early trading

Online edition of India's National Newspaper
Tuesday, Sep 23, 2008
ePaper | Mobile/PDA Version

Business

Business

Wall Street falls in early trading

Investors await further news on the bailout plan

— PHOTO: AP

IN TRANSIT MODE: Sheikh Nasser Al-Mohammad Al-Ahmad Al-Sabah (right), Prime Minister of Kuwait, visits the post that trades Merrill Lynch on the floor of the New York Stock Exchange on Monday. He is accompanied by NYSE CEO Duncan L. Niederauer (centre), and specialist Glenn Carell.

NEW YORK: Wall Street fell in early trading on Monday as investors nervously awaited further news about the government’s plan to buy $700 billion in banks’ mortgage debt. The Dow Jones industrials were down more than 150 points while the credit markets remained nervous, but not showing the signs of panic that Treasury trading saw last week.

Investors are relieved that federal authorities are taking action to relieve the nation’s banks of their toxic assets. But it is not sure yet how successful the plan will be in loosening up the credit markets and propping up the sinking housing market.

Bush administration officials and congressional leaders have been meeting on the rescue plan, the main thrust of which congressional leaders have endorsed. Investors are also digesting a mix of corporate news. Microsoft said it plans to repurchase its shares. And Morgan Stanley said it is working to sell up to a 20 per cent stake to Mitsubishi UFJ Financial Group.

Change of status

The Federal Reserve on Sunday granted Morgan Stanley and Goldman Sachs, the country’s last two major investment banks, approval to change their status to bank holding companies.

The change of status will allow the companies to set up commercial banks that will be able to take deposits, significantly bolstering the resources of both.

They also will be subject to more regulation. That shift came a week after negotiations failed to save Lehman Brothers Holdings. That and the government’s plan to bail out American International Group Inc. helped lead to a seizing up of the credit markets that spurred the government to formulate its plan to rescue companies from their crippling debt. — AP

Printer friendly page
Send this article to Friends by E-Mail

Business