Recession Worries Continue as Credit Markets Show Signs of Thawing
Worries over a worldwide recession loomed over financial markets even as global credit markets continued to show signs of thawing on Wednesday.
A day after the U.S. and other countries announced further steps to shore up the struggling banking system, key lending rates eased further. The London interbank offered rates, or Libor, the benchmark for many other interest rates, also fell.
"Following the release of national 'bailout' plans from UK, Germany, France, U.S. and others, there are early signs that the severe money-market tension of the last month may be easing," said Meyrick Chapman, strategist at UBS. "We think the easing will continue."
However, investors on Wall Street and around the world weren't able to cast off their worries—despite the latest financial rescue plan.
U.S. stocks slumped after JPMorgan Chase reported a whopping 84 percent decline in its third-quarter profit. And, European and Asian markets mostly fell back Wednesday following a strong two-day rally.
Investors also turned their gaze toward the economy's obstacles: vanishing jobs, shrinking paychecks and nest eggs, and slumping home values continue to force millions of Americans to pull back.
Published on October 15, 2008
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