Stagnation adds to fear Friday.
US stock markets open lower on two sobering developments: a meeting at the White House with key lawmakers, including presidential candidates John McCain and Barack Obama, ends without agreement on the $700 billion financial rescue plan; the U.S. shuts down Washington Mutual, America's biggest savings and loan, wiping out its stock. JPMorgan Chase snaps up WaMu's assets and deposits for $1.9 billion.
"This is probably the most chaotic situation I have ever seen...you've got law makers playing Russian Roulette with the entire economy," Jack Bouroudjian, chairman of Capital Market Technologies, tells CNBC.
The bailout stalemate takes its toll, as shares of Wachovia and National City tumble on worries about heavy mortgage losses, despite each firm having other, profitable businesses.
What You Were Reading:
- $700 Billion May Not Be Enough: Dr Doom
- Charts: Small Caps Falling — Hard
- JPMorgan Buys Failed WaMu Assets for $1.9 Billion
Freddie Mac says its investment portfolio fell sharply in August prior to its takeover by the US government in early September.
Friday's stock trading ends on a surprise note: After starting the day down more than 100 points, the Dow finishes up more than 1 percent at 11140.26, as traders pile in to JPMorgan Chase , Bank of America, American Express and Citigroup. The S&P 500 ekes out a gain but the Nasdaq finishes down as Research In Motion's outlook rattles investors.
What the Experts Were Saying:
Michael Darda of MKM Partners dissects the new wave of fear gripping the credit markets today.
Washington Mutual employees are wondering who JPMorgan will keep on. Mary Thompson and Jane Wells report.
Another wild week: Courtney Reagan reviews the top business and investing stories.