News at a Glance

• Another Fall: Stocks sharply lower at the start.
• 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 and into the U.S. Monday even as governments and central banks pulled levers to promote stability.

Stocks were sharply lower open as traders reacted to a global selloff sparked by turmoil in the world's financial markets. By 9:38 a.m., the Dow Jones Industrial Average had lost 205 points at 10120. The Nasdaq had dropped 47 to 1900, and the S&P 500 had given up 25 at 1074.

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 stood down more than 4.9% in afternoon trading.

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

Treasury Secretary Henry Paulson is expected to name 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, The Wall Street Journal reported.

The commodities market reflected the global selloff. In energy, oil prices took a fall. By 8:49 a.m., crude traded down $3.94 at $89.94 a barrel on concern over demand. Meanwhile, gold prices jumped $29.60 to $862.80 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.