Stocks drop again as AIG receives government bailout

By James VandeBerg

As yet another financial firm faces government intervention, stocks continued to drop Wednesday afternoon.

As of 4 p.m., the Dow Jones Industrial Average had dropped 450 points, or 4.1% of total value for the day.

AIG, one of the world’s largest insurance firms, received an $85 billion government bailout today intended to stave off a collapse that could lead to further instability in the financial sector.

This news comes on the heels of another large downturn Monday, when investment banking firm Lehman Brothers entered the largest Chapter 11 bankruptcy in American history.

On the same day, Bank of America agreed to purchase troubled investment firm Merrill Lynch.

Get The Daily Illini in your inbox!

  • Catch the latest on University of Illinois news, sports, and more. Delivered every weekday.
  • Stay up to date on all things Illini sports. Delivered every Monday.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Thank you for subscribing!

“If the (financial) system implodes much more, we could be facing a serious downturn,” said Fred Giertz, head of the department of economics.

Students planning on finding careers in the financial sector in upcoming months will likely be the most affected at the University, Giertz said.

“It will be harder to find jobs when firms are laying off the people they already have, let alone not hiring new people,” he said.

Students’ families could also by affected by any recession that may occur, Giertz said, which could lead to less money in their pockets and decreased spending power.