Source: FT.com

The credit storm swept through Wall Street and Main Street with renewed virulence on Monday as AIG and Fannie Mae reported huge losses, a leading US retailer filed for bankruptcy and multinationals such as Nortel and DHL cut thousands of jobs.

The bad news coming from both the financial and corporate sectors underlined the broadening of a crisis that claimed its first victims among banks and insurers but has spread to the rest of the global economy.

The poor performance of sectors from insurance to logistics, and the announcement that the electronics retailer Circuit City had filed for bankruptcy protection, reversed early gains and sent main stock indices lower. The S&P 500 closed down 1.3 per cent while the Dow Jones Industrial Average fell 0.8 per cent.

The equity market falls came despite a 10 per cent jump in the shares of AIG, after the insurer confirmed details of a new $150bn government bail-out package.

Technorati Tags: Nortel , DHL

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