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New York (AP)

Stocks sink Wednesday after AIG bailout

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Federal Reserve Leaves Interest Rates Unchanged
On Wednesday stocks were trading down by almost 200 points after the government bailout of insurance giant AIG on Tuesday.
Spencer Platt/Getty Images

Wall Street has plunged again as investors grow increasingly fearful about more turmoil in the financial system even after the government's bailout of insurer American International Group Inc. The market's losses are nearly on pace with those seen in Monday's nosedive and investors are seeking the safety of hard assets and government debt. Gold, oil and short-term Treasurys are soaring.

The Federal Reserve is giving a two-year, $85 billion loan to AIG in exchange for a nearly 80 percent stake in the company after it lost billions in the risky business of insuring against bond defaults. But the move has failed to reassure investors.

The Dow Jones industrials are ending down 447 points at the 10,612 level.

Gallery
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Federal Reserve Leaves Interest Rates Unchanged
On Wednesday stocks were trading down by almost 200 points after the government bailout of insurance giant AIG on Tuesday.
Spencer Platt/Getty Images
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Wall St. sign next to the New York Stock Exchange
A Wall St. sign next to the New York Stock Exchange (NYSE) Wednesday in New York City.
Photo by Spencer Platt/Getty Images