Below 10,000

News at a Glance

• Another Fall: Dow plummets 370 to finish below 10000.
• Trouble Abroad: World markets dive as investors panic.
• BofA's Bill: Bank and states agree to $8.4 bln settlement.
• Thanks, Ben: Fed to pay interest on banks' additional reserves.

The Lowdown

A cascade of investor panic swept across the world Monday even as governments and central banks pulled levers to promote stability.

Stocks plummeted as traders reacted to a global selloff sparked by turmoil in the world's financial markets. Each the major U.S. indexes had lost more than 3.5%. The Dow Jones Industrial Average fell 370 points to 9956. The Nasdaq dropped 84 to 1863, and the S&P 500 gave up 42 at 1057.

The market's retreat, which began last week as Congress prepared its bailout package, took the Dow back to March 1999, when the blue-chip index first eclipsed the 10000 mark. The session was highly volatile: at one point, the Dow stood down by as many as 800 points.

Traders bolted despite panicked efforts by the world's governments to calm the storm. Germany, Denmark, Austria and Sweden each enacted or expanded programs to guarantee deposits to help avert domestic bank runs. Russia paused trading when its benchmark index fell more than 14%. South Korea said it would tap foreign exchange reserves. Vietnam reshuffled its holdings, sheltering more of its investments in Hong Kong.

The subsequent wave of selling began in Asia and made its way west, rocking European markets before eroding shareholder value in the U.S. Japan's Nikkei lost 4.3%. Hong Kong's Hang Seng dropped 5.0%. In Europe, the major indexes of London, Frankfurt and Paris each fell more than 7.0%.

At home, officials worked to raise investor confidence and promote more liquidity. The Federal Reserve said it would push more liquidity into the financial system and pay banks interest on the additional reserves they are now required to set aside.

Separately, Treasury Secretary Henry Paulson tapped Neel Kashkari, an assistant secretary for international affairs and a fellow alumnus of Goldman Sachs (GS), to lead the bailout effort approved by Congress last week. Kashkari will preside over the Office of Financial Stability.

The commodities market reflected the global selloff. In energy, oil prices took a fall. By 3:58 p.m., crude traded down $5.88 on the day at $88.00 a barrel on concern over demand. Meanwhile, gold prices jumped $24.80 on the day to $858.00 an ounce, as investors sought refuge in hard assets.

Corporate News

• Bank of America (BAC) agreed to pay roughly $8.4 billion to settle claims brought against Countrywide Financial by state attorneys general regarding its mortgage lending practices, the firm said. The deal will effectively lower the interest and principal payments of almost 400,000 Countrywide customers. California, Florida and Illinois were instrumental in brokering the deal.
• Citigroup (C) and Wells Fargo (WFC) remain entrenched in the battle to acquire Wachovia (WAC). On Sunday night, the Appellate Division of State Supreme Court of New York rejected a court order that would have given Citi more time to seal its government-backed deal. Citi said it would appeal the decision. Wells Fargo had offered a competing bid that did not involve federal funding.
• Eli Lilly (LLY) agreed to acquire ImClone (IMCL) for nearly $6.1 billion, or $70 a share, the firm said. The deal, which strengthens Lilly's near-term pipeline for cancer drugs, came after ImClone rejected two lower bids from Bristol Myers Squibb (BMY).

The Economy

• There are no signficant economic reports scheduled to be released today.

ReadMe

• The Associated Press on bank failures: More financial institutions will go under over the next year because they do not stand to benefit from the government's rescue package. STORY
• The New York Times on the consumer: A decrease in spending bodes poorly for the larger economy. STORY
• Fortune on women in business: The magazine presents its annual list of the 50 most powerful women in business. STORY

WatchMe

• CNBC on inflation: Ian Bremmer, president at Eurasia Group, says growth in emerging markets could leave demand for commodities high, leaving the global economy at risk for inflation. VIDEO
• Bloomberg on oil prices: David Bensimon, managing director at Polar Pacific Capital, says oil prices could drop to $80 a barrel next year. VIDEO
• Wall Street Crisis: Is Your Money Safe?: The network's new series examines the current climate for personal investing. CNBC, 7 p.m.