Stock markets around the world dropped sharply Monday as several financial institutions reported more losses.
Major European markets fell as the banking giant HSBC reported a nearly
70-percent drop in 2008 net profits. The institution also announced it
needs to raise about $18 billion in new capital.
London's Financial Times 100 index also briefly hit a six-year low and closed down five-and-a-third percent.
In the United States, the Dow Jones Industrial Average traded below 7,000 points for the first time since 1997.
Analysts predicted lower U.S. trading after the early morning news that
the insurance giant American International Group, or AIG, lost more
than $60 billion in last year's fourth quarter. The U.S. Treasury
unveiled a revised rescue package for AIG, promising to provide an
additional $30 billion on an "as needed" basis.
White House spokesman Robert Gibbs told reporters in Washington that
the additional government action on AIG is "critical" to prevent the
insurer from posing a further threat to the financial system.
Oil prices dropped more than 10 percent in New York trading Monday, as
investors worried that the recession will further cut energy demand.
The price of a barrel of oil for future delivery dropped more than four dollars to hit $40.20.