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New York: US regional bank Wachovia Corp succumbed to the worldwide credit crisis and authorities rescued a slew of European banks, while US lawmakers met to vote on a $700 billion bailout of the financial industry.
US stocks fell more than 2 percent following sharp declines in Asian and European shares on fears the crisis was spreading. Global money markets remained frozen, even as central banks poured in cash in an attempt to boost liquidity.
"These (bank) announcements couldn't have worse timing because they're taking the shine off the potential bailout," said William Larkin, fixed income manager at Cabot Money Management in Salem, Massachusetts.
As lawmakers met in Washington, President George W. Bush urged them to pass the bailout package quickly, saying it was needed to keep the financial crisis from spreading.
The bailout came too late for Wachovia, which agreed to sell most of its assets to Citigroup Inc in a deal brokered by the Federal Deposit Insurance Corp.
"In this period of market stress, we are committed to taking all actions necessary to protect our financial system and our economy," Treasury Secretary Henry Paulson said after the Wachovia deal was announced.
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