Wall Street in crisis of confidence
Futures sink as Fed's emergency cut to discount rate, Bear Stearns takeover heighten fears about health of financial system.
LONDON (CNNMoney.com) -- U.S. stocks looked set for a miserable start Monday as the Federal Reserve's cut to the discount rate and sale of Bear Stearns deepened fears about the health of the financial sector.
At 5:22 a.m. ET, Nasdaq and S&P futures were sharply lower, suggesting heavy losses at the market open.
The Fed lowered the rate at which it lends loans to financial institutions to 3.25% on Sunday in a move to stem the credit crisis which has squeezed banks.
The announcement came just after JP Morgan Chase & Co. (JPM, Fortune 500) agreed to buy troubled Wall Street firm Bear Stearns Cos. (BSC, Fortune 500) for just $2 a share, or about $236 million.
The fire sale of Bear Stearns, along with the Fed's emergency move, heightened concerns that the credit crisis may keep roiling financial firms worldwide.
The growing fears sent global markets in chaos. The dollar dived to a near 13-year low against the yen, and oil prices soared to a new all-time trading high near $112 a barrel.
Asian stocks tumbled, with Hong Kong shares down 5% and Japan's benchmark index finishing the session nearly 4% lower. European stocks opened sharply lower. 
