Wall Street mixed after Fed boost
The US Federal Reserve's latest £518 billion stimulus package has led to a mixed day on Wall Street after new figures showed the economic crisis engulfing the country was even worse than first feared.
Two new programmes from the US central bank and the Treasury department took the total amount of government funds in the crisis to almost £4.5 trillion.
The move boosted investors' confidence but even as it was being announced the Commerce Department's figures showed the nation's gross domestic product (GDP), considered the best barometer of the country's economic fitness, was worse than expected.
The GDP, the value of all goods and services produced within the US, shrank at a 0.5% annual rate in the July-September quarter, weaker than the 0.3% rate of decline first estimated a month ago, and the worst showing since the third quarter of 2001.
US Treasury Secretary Hank Paulson - who told reporters he intended to "run to the end" of his term in office - said the injection of £518 billion into the US economy was intended to address the US housing and credit crisis.
The funds were in addition to the £454 billion rescue plan enacted last month - the largest US government bail-out in history.
Mr Paulson has been criticised in recent weeks for continually revising the focus of the government's response to the crisis.
But, at a press conference in Washington, he defended all the changes, saying there was no one response adequate by itself to deal with a once or twice-in-a-century financial crisis.
"It is naive for any of us to think that when you are dealing with a situation of this magnitude that a Bill could be passed or a single action taken to make all the issues go away," he said.
Since September, when credit markets first froze, financial institutions have been hesitant to hand over money for fear they will not be repaid.
