Credit Crunch In U.S. Upends Global Markets

August 10, 2007
Credit Crunch In U.S. Upends Global Markets

NEW YORK, Aug. 9 -- The turmoil in the U.S. credit markets turned global Thursday, prompting central banks in Europe and the United States to pump more than $150 billion into the financial system to keep it operating smoothly.

U.S. stocks suffered their second-worst decline of the year as the cost of borrowing for corporations continued to rise and some investors urged policymakers to help.

Some economists predicted that the tightening credit market would be a drag on the economy, but others said the impact would be minimal. Yet signs were emerging that the nation's credit problems were spreading in unpredicted ways.