A battered financial sector led Wall Street into bear market territory on Thursday, as Bill Gross, manager of the bond fund Pimco, warned that a “financial tsunami” could ensue if the government failed to support markets.
Credit-card groups were among the key casualties as fears grew of rising defaults. American Express fell 5.3 per cent to $38.75 after Lehman Brothers forecast net charge-offs – a measure of uncollectable debts – on its cards would reach to 8.5 per cent of loans by next year.
