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NEW YORK (AP) - Wall Street begins the new week trying to come to terms with just how bad the fallout from the credit crisis is — so bad that an investment bank worth $20 billion weeks ago has been bought for just $236 million.
The news late Sunday that JPMorgan Chase & Co. will buy Bear Stearns for a sum that's considered paltry by Wall Street standards is likely to leave investors shaken. What might give stocks some support is the Federal Reserve's latest steps to inject cash into the banking system — steps aimed at lifting the economy but also to restore some confidence to investors. But how much that will help stocks, and for how long, is a big question on the Street.
Wall Street faces a paradox as trading opens — the more investors find out about the problems caused by billions of dollars in failed mortgages and investments, the more unknowns seem to crop up. And the near-collapse of Bear Stearns after it invested heavily in risky mortgage-backed securities, while it ends uncertainty about one company, still raises concerns about how badly wounded other financial institutions might be.
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