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US Stock Markets Soar on Report Washington May Have Crisis Plan


U.S. stock market indexes soared about four percent in Thursday's afternoon trading following reports that the government may create an institution to deal with troubled banks and investments.

News reports say Treasury Secretary Henry Paulson is considering a progam similar to one that disposed of insolvent savings and loan banks two decades ago. That organization sold real estate and other assets held by the distressed companies.

Earlier in the day, fears of a global financial meltdown forced the world's major central banks to join forces to pump hundreds of billions of dollars into the world's financial markets. The banks, including the U.S. Federal Reserve, hoped the move will help restore the confidence of investors, who had sent key stock indexes spiraling downward in recent days.

U.S. President George Bush tried to calm nervous investors in a televised speech from the White House today. He outlined a list of "extraordinary" steps the government has taken to help markets. He pledged to continue working to restore investor confidence.

Still, Russian officials suspended trading again today on the country's two leading financial markets (RTS and Micex). Tokyo's Nikkei Index fell to its lowest level in three years. And Chinese officials are taking action to stabilize that country's economy.

The Federal Reserve gave an 85-billion-dollar emergency loan earlier this week to bail out the world's biggest insurance company, American International Group (AIG).

The U.S. central bank said the loan was necessary to prevent a "disorderly failure" of AIG that could make troubled financial markets worse. AIG nearly collapsed after major losses in the housing crisis.

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