US President George W Bush said today his administration would move aggressively to address the financial markets crisis, but he acknowledged that anxiety was feeding on itself which was sending stocks plummeting.
Mr Bush was speaking as the US markets opened sharply down and Europe and Asia witnessed panic selling of stocks which knocked the benchmark world equity index to a 5-year trough
Despite Mr Bush's attempt's to reassure both citizens and financial markets,the Dow and the S&P 500 fell for an eighth day , as a dramatic late-day comeback stalled out to cap the worst week ever for the S&P 500.
Based on the latest available data, the Dow Jones industrial average was down 128.00 points, or 1.49 per cent, to end unofficially at 8,451.19. The Standard & Poor's 500 Index dropped 10.70 points, or 1.18 per cent, to close unofficially at 899.22.
The Nasdaq Composite Index inched up 4.39 points, or 0.27 per cent, to finish unofficially at 1,649.51.
For the week, both the Dow and the S&P 500 finished down 18 percent, while the Nasdaq unofficially slid 15.3 percent.
In trading today oil also fell to a one-year low as fears grew policymakers are not making enough efforts to contain the financial crisis.
"The United States government is acting; we will continue to act to resolve this crisis and restore stability to our markets," Bush said this afternoon in the White House Rose Garden. "We can solve this crisis and we will."
He said the Treasury Department would work quickly to implement the $700 billion financial sector rescue plan approved a week ago and that the Securities and Exchange Commission was stepping up its efforts to fight manipulation in the stock.
In Dublin, the Iseq index of leading shares lost 5.48 per cent, or 166.54 points to close at 2,871.25. That was a loss of almost 20 per cent on the week as the Iseq opened at 3587.69 on Monday.
Government bonds in Japan and the euro zone - usually safer assets which outperform in times of risk aversion - fell as investors dashed to cash in any assets they have to gain access to capital.
Equity trading in Russia, Iceland, Romania, Ukraine and Indonesia has been halted while nearly half the stocks in Milan are suspended for excessive losses, just hours before finance chiefs from Group of Seven rich nations meet in Washington.
So far, measures from the United States, Britain and other countries to fight the worst financial crisis in 80 years - even this week's coordinated interest rate cuts - have failed to calm credit and money markets and quell investor fears.
"The stark reality is that markets have judged the coordinated interest rates cut not to have been enough, and we are now left wondering how best to get ourselves out of this downward spiral," said Chris Hossain, senior sales manager at ODL Securities.
"One gets the feeling that this market is now strictly confined to the brave." MSCI world equity index fell more than 4 per cent at one point to a five-year low, losing a fifth of its value this month alone.
The index has lost 43 per cent since January, on track for its worst weekly, monthly and yearly performance in 20 years.
Japanese stocks fell nearly 10 per cent for their biggest one-day percentage loss since 1987. Yamato Life Insurance, an unlisted midsized insurer, became the first Japanese financial institution to collapse in this crisis.
In Japan, investors dumped even domestic government bonds - considered safer than most other assets - as fears of counterparty defaults froze the key repurchase market, prompting dealers to sell bonds to secure cash.
"This is panic... There's nothing left for us to trust," said Takashi Ushio, head of investment strategy at Marusan Securities. "Investors are scurrying to convert to cash. A lack of confidence is coupling with panic."