NEW YORK (Reuters) – JPMorgan Chase & Co set a deal to buy stricken rival Bear Stearns for a rock-bottom price, while the U.S. Federal Reserve expanded lending to securities firms for the first time since the Great Depression to prop up the financial system.
The shock news, the biggest sign yet of how devastating the credit crisis is for Wall Street, slammed the U.S. dollar to a record low against the euro, pummelled Asia stock markets and boosted gold and low-risk bonds.
The Fed also made an emergency quarter-point cut in its discount rate and agreed to finance up to $30 billion (14.8 billion pounds) of Bear’s assets as U.S. Treasury Secretary Henry Paulson pledged the U.S. government is prepared to do "what it takes" to maintain the stability of the financial system.
