Investors nervous after US bank rescue; In association with BUSINESS VENTURE.
Rival JP Morgan Chase's bail-out of the cash-strapped bank - backed with funds from New York's Federal Reserve - raised the spectre of Northern Rock's crisis in a new sign of the financial shockwaves from the credit crunch.
The news sent Wall Street's Dow Jones Industrial Average down almost 200 points, or 1.6%, while the London's FTSE 100 Index fell 1% amid frayed nerves among investors.
David Buik, of spread betting firm Cantor Index, said: "This week could be very uncomfortable and volatile with the credit crisis taking its toll on confidence."
With the Bear Stearns rescue casting a shadow over markets, several US investment banks are also due to report first quarter earnings this week - which could add to the gloom with billions more in write-downs on investments linked to high risk mortgages.
Spiralling defaults among US homeowners with poor credit have shattered confidence in bonds based on the mortgages and banks are reluctant to lend to each other.
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|Publication:||Daily Post (Liverpool, England)|
|Date:||Mar 17, 2008|
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