Wall Street opens steeply lower

Wall Street tumbled in early trading Monday as Wall Street and other global markets reeled from JPMorgan Chase & Co.'s government-backed buyout of the invalid investment bank Bear Stearns Cos. The Dow Jones industrials fell about 150 points in the first few minutes of trading.

On top of supporting the buyout, the Federal Reserve took the extraordinary step of lowering the rate it charges to loan directly to banks on Sunday night -- two days before its scheduled meeting Tuesday. The central bank lowered the discount rate by a quarter point to 3.25 percent.

A buyout of Bear Stearns was certainly more appealing than the alternative: letting the investment bank collapse and causing huge losses for anyone linked to it. But Bear Stearns' implosion -- and the fact that JPMorgan valued the fifth-largest Wall Street investment bank at a paltry $2 a share, or $236.2 million -- stirred fear among investors worldwide that other banks had sizable exposure to troubled credit markets.

"That is just unbelievable," said investing consultant Scott Fullman. Bear Stearns stock closed at $30 a share on Friday. "It implies there is more risk in here than has been apparent."

Stocks also fell sharply in Asia and Europe.

Dow Jones Industrial Average fell 144.91 points (1.21 percent) to 11,806.18 in the first five minutes, coming back slightly from sharper opening losses.

The Nasdaq composite tumbled 39.84 points (1.80 percent) to 2,172.65 and the Standard & Poor's 500 index retreated 20.95 points (1.63 percent) to 1,267.19.

(Agencies)