The unprecedented government rescue of insurance giant AIG calms the market's angst, but the question is whether credit markets will cooperate with the Fed and what other shoes are there left to drop.
American International Group will avoid bankruptcy with the help of an $85 billion bridge loan from the federal government, in exchange for an 80 percent stake in itself, sources told CNBC.
The Bond kings react to the Fed leaving the interest rate unchanged at 2 percent, while Morgan Stanley reports strong earnings numbers. Following are today's top videos:
Maria Bartiromo discusses Tuesday's top business and financial stories -- and looks ahead to tomorrow's events.
Morgan Stanley trading up 3 percent after the close, as it pre-announced earnings above expectations. CEO John Mack said, "We have continued to actively reduce our legacy postions and carefully manage our risk, capital and liquidity." Several factors worked in favor of today's modest but important rally.
There is a certain air of disbelief on the Street today concerning AIG. Bank of America's analyst epitomized this: "AIG is facing a near-term liquidity issues, as opposed to solvency issues," a report this morning said. All insisted they have plenty of assets to sell.
The already roiled markets have a new fear: the survival of AIG.
Wall Street had its worst day in more than six years on Monday as fears about the U.S. financial system's stability escalated after Lehman Brothers filed for bankruptcy.
Stocks had their worst selloff since the Sept. 11 attacks in 2001, with the Dow plummeting more than 500 points amid escalating fear about a collapse of AIG.
Stocks fell sharply at the opening bell Monday after a trifecta of Wall Street pain: Lehman Brothers filed for bankruptcy, Merrill Lynch was bought by Bank of America and AIG asked the Fed for short-term financing.
Stocks fell sharply at the opening bell Monday after a trifecta of Wall Street pain: Lehman Brothers filed for bankruptcy, Merrill Lynch was bought by Bank of America and AIG asked the Fed for short-term financing.
Stocks looked set to plummet Monday after a trifecta of Wall Street pain: Lehman Brothers filed for bankruptcy, Merrill Lynch was bought by Bank of America and AIG asked the Fed for short-term financing.
There really isn't a bad risk in the insurance business. There is bad pricing of that risk.