- The Washington Times - Tuesday, November 11, 2008

The credit crisis continued unabated Monday as the Treasury Department handed American International Group another huge chunk of cash and mortgage company Fannie Mae’s third-quarter profits plummeted.

But global markets rallied on news of China’s $586 billion plan to stimulate its weakening economy - one of the world’s leading economic engines.

Trading on Wall Street opened strong, with the Dow Jones Industrial Average up 150 points early. But at the closing bell the Dow had fallen 73.27 points, or 0.82 percent, to end the trading session at 8,870.54. The Nasdaq Composite Index dropped 30.66 points, or 1.86 percent, to 1,616.74, while the S&P; 500 declined 11.78 points, or 1.27 percent, to 919.21.

In Washington, the Treasury Department provided American International Group (AIG) with a $40 billion cash infusion in exchange for preferred stock as part of a restructuring of the giant insurer’s September rescue package.

In all, the federal government has given the company more than $150 billion. But Federal Reserve officials said they were confident the money would be repaid to taxpayers.

AIG was driven to the brink of bankruptcy in September as it was forced to raise collateral to back the insurance it provided on its huge portfolios of troubled loans.

New York-based AIG said it lost $24.47 billion, or $9.05 per share, after a profit of $3.09 billion, or $1.19 per share, a year ago. Revenue declined 97 percent to $898 million from $29.84 billion in the third quarter of 2007.

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