REUTERS: NEW YORK (Reuters) - Stock index futures fell on Friday after congressional talks on a $700 billion financial sector bailout stalled and authorities seized the largest U.S. thrift, heightening worries about the fallout from the credit crisis.
Congressional leaders were set to try again on Friday to agree on a rescue plan, one of the costliest since the Great Depression, after talks descended into chaos overnight. Meanwhile, investors moved to pare back risk, with stock markets falling in Asia and in Europe.
In another worrying development, U.S. banking authorities closed Washington Mutual (WM.N: Quote, Profile, Research, Stock Buzz) in by far the largest failure of a U.S. bank. WaMu had about $307 billion of assets and $188 of deposits. Its banking assets were sold to JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) for $1.9 billion.
"The negotiations over the bailout are sapping the enthusiasm that people could have for the market," said Rick Meckler, president of investment firm LibertyView Capital Management in New York. "I think with no agreement, it's going to be hard for the market to push ahead." Futures Plunge on Bailout Impasse, Bank Collapse >>> By Ellis Mnyandu | September 26, 2008
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