"The Dow Jones Industrial Average ended up 145.51 points, or 1.3%, at 11,059.02," and Wall Street had a strong showing today in light of news that struggling insurer AIG may be getting financial support from the Federal Reserve. "The S&P 500 gained 20.9 points, or 1.8%, to 1213.60. The Nasdaq climbed 27.99 points, or 1.3%, to 2207.90," reports The Street.
Former AIG chairman Maurice "Hank" Greenberg may be jockeying to see that his company, C.V. Starr, takes over his former employer. A lawyer working for Greenberg did not comment.
Bankrupt investment bank Lehman Brothers plans to seek primary approval for sale of its assets today. Judge James Peck of the U.S. Bankruptcy Court in the Southern District of New York is scheduled to hear the case.
The Federal Reserve left interest rates at 2 percent today, despite calls for it to be lowered during the market crunch subsequent to Lehman's bankruptcy. "The committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability,'' the Federal Open Market Committee said in a statement.
British bank Barclays is trying to acquire portions of erstwhile investment bank Lehman Brothers, which filed for Chapter 11 bankruptcy yesterday. Barclays was originally pegged to partner with Lehman to keep the bank afloat, yet pulled out over the weekend over concerns about the security of its investment.
Struggling insurance company AIG is getting $20 billion in cash from New York state, in addition to a credit facility worth $70 billion to $75 billion in the works from JPMorgan and Goldman Sachs. The three major credit agencies downgraded AIG’s rating: Fitch down two notches from AA-minus to A; Moody’s down two notches to A2 from Aa3 and S&P down three grades to A-minus from AA-minus.
Hewlett-Packard is cutting 24,600 jobs, about 7.5 percent of its workforce to maxmize possible savings from its $13.2 billion acquisition of Electronic Data Services. The deal, unveiled in May and finalized last month, made HP the world's second-largest provider of technology and technology services, behind IBM.
To assuage market fallout from Lehman’s bankruptcy, central banks in Europe scurried to inject funds into money markets. The European Central Bank, responsible for the euro, put €70 billion onto the overnight market yesterday and the Bank of England, which controls the pound sterling, “followed Monday’s injection of £5bn of cash until Thursday, with an additional £20bn on Tuesday,” the Financial Times reports.
Shares of flailing Seattle-based bank Washington Mutual were up 10 percent on the back of news that JP Morgan & Chase was planning to take it over, however sources told Reuters that the investment bank was not actively negotiating to take over WaMu, the largest savings and loan institution in the United States.