Wall Street Makes Modest Recovery

4:00pm Market Indexes

30 industrials 11059.02 up 141.51 or 1.30 percent
20 transportation 5030.82 up 73.56 or 1.48 percent
15 utilities 447.50 up 2.16 or 0.49 percent
65 stocks 4008.23 up 47.62 or 1.20 percent

Major Market Indexes
New York Stock Exchange 7793.13 up 112.98
American Stock Exchange 1835.64 down 11.05
Nasdaq composite 2207.90 up 27.99
Standard and Poors 500 1213.60 up 20.91

Fed pumps $70B into nation's financial system

WASHINGTON (AP) - Urgently trying to keep cash flowing amid a financial meltdown, the Federal Reserve has pumped another 70 billion dollars into the nation's financial system.

The Federal Reserve Bank of New York's action came in two operations in which 50 billion dollars and then another regularly scheduled 20 billion were injected in temporary reserves.

The maneuver takes place as Federal Reserve Chairman Ben Bernanke and his central bank colleagues meet today to decide their next move on interest rates and conduct a fresh assessment of the country's financial and economic troubles.

Some believe the financial system turmoil raises the odds the Fed will cut rates. Others still predict the Fed will hold its key rate steady at 2 percent.

Rough day on Wall Street expected Tuesday for nervous investors

NEW YORK (AP) - Wall Street is extending its massive decline as nervous investors grapple with concerns about insurer American International Group Inc. and await the Federal Reserve's decision on interest rates.

Worries about AIG have intensified after several ratings agencies reduced their ratings on the company. Investors are worried that a failure by the world's largest insurance company would touch off a wave of financial turmoil.

And comments from Goldman Sachs Group Inc. about the banking sector added to investors' glum mood a day after the Dow Jones industrial average fell more than 500 points.

The Dow is down 113 at the 10,803 level.

AIG shares sink as it tries to shore up books

By IEVA M. AUGSTUMS and STEPHEN BERNARD
AP Business Writers

NEW YORK (AP) - Shares of American International Group Inc. Are falling sharply as investors grew increasingly pessimistic the world's largest insurer would find funding to avoid a liquidity crunch that could touch off even more global financial turmoil.

AIG shares were down $3.02, or 63 percent, to $1.74 in early trading Tuesday. Shares have traded as high as $70.13 during the past year.

Late Monday night, S&P, Moody's and Fitch all cut their ratings on AIG, which could require the insurer to post billions of dollars in collateral on derivatives contracts.

The insurer has been working with regulators to create a financing plan. New York has already relaxed its regulations to allow AIG to use $20 billion of assets held by its subsidiaries to provide cash needed to remain in business.

European markets slide on U.S. woes

PARIS (AP) - World stock markets are swooning again as the global financial crisis causes investors to worry asset prices still haven't hit rock bottom.

In early afternoon trading, markets in France and Germany were down about one-and-a-half percent, while London was down over 3 percent.

Earlier, markets in Asia dropped around 5 percent.

Financial stocks across Europe are especially taking it on the chin. The collapse of Lehman Brothers and credit downgrades of American International Group are helping to fuel investor worries about wider financial and economic damage.

One research head in Hong Kong calls today "a bloodbath" marked by "panic selling."

(Copyright 2008 by The Associated Press. All Rights Reserved.)

More coverage of the financial crisis Tuesday morning from The CBS Early Show

Ray Martin provides answers on how the Wall Street crisis will affect your personal finances from The CBS Early Show.