Global markets react to Wall Street crisis

PARIS, Sept. 15 (UPI) -- Deteriorating conditions in the U.S. stock market rippled through global trading Monday, as stocks in Europe and Asia tumbled and the U.S. dollar fell.

Investor confidence took a beating Sunday with the news that Merrill Lynch agreed to sell itself to Bank of America for roughly $50 billion and Lehman Brothers said it would file for Chapter 11 bankruptcy protection, The New York Times reported.

Hardest hit in Europe was UBS of Switzerland, which saw shares tumble 7.2 percent.

"Confidence has really collapsed," Yann Azuelos, fund manager at Meeschaert in Paris, told the Times. "With the (U.S. government) rescue of Fannie (Mae) and Freddie (Mac), we thought the worst had passed. Now we know it hasn't."

The Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. were taken over by the U.S. government last week.

In Europe, the Dow Jones Stoxx 600 Index declined 3.4 percent, while the FTSE in London fell 3.8 percent and the CAC-40 in Paris dropped 4.1 percent. Stock markets in Japan, South Korea, Hong Kong and China were closed for holidays but the benchmark Taiwan index lost 4.1 percent.

In foreign currency exchange, the U.S. dollar fell against the yen to 105.69 The euro pushed higher, reaching $1.448 before settling back to $1.425 in intraday trading.