Euphoria fades. Fear glows. Futures are lower ahead of the open Monday as the market digests the weight of previous days' events. And stocks don't seem to recover.
"It's the fear of the unknown," says Al Goldman, chief market strategist at Wachovia Securities. "We got used to writeoffs...we had so many shoes drop that it didn't mean anything. Then, over the weekend, we get [the message] 'Wall Street has changed forever'...This is a real shock."
Japan's largest bank, Mitsubishi UFJ Financial Group, says it plans to buy a 10- to 20- percent stake in Morgan Stanley .
The latter had been in talks to merge with Wachovia, but sources tell Charlie Gasparino and Mary Thompson that Mitsubishi's move, combined with the Fed's decision to allow Morgan and Goldman Sachs (the last two major US investment banks) to change their status to bank holding companies means that talks with Wachovia are in all likelihood dead.
What You Were Reading:
The New York Stock Exchange announces plans to add 30 more stocks to the short-selling ban list, including CNBC parent General Electric , CIT Group , Legg Mason and American Express .
The expansion of the short-selling ban does little to help financial shares: Washington Mutual tumbles 22 percent, while Wachovia and Wells Fargo close down more than 11 percent.
Credit crunch ripples continue: as a proposal to fund $25 billion in low- interest loans to the industry is included on Monday in draft legislation that could be considered by Congress later this week. GM, Ford and Chrysler say they cannot make necessary operations upgrades without financial help, as they face ever-tighter credit prospects on top of their already daunting finances and outlooks.
The Dow
loses nearly 373 points, or 3.3 percent, to close at 11015.69. Financials account for three of the top four decliners. The S&P 500
