Business Highlights

NEW YORK (AP)--There are new signs that the worst of the global credit crisis is yet to come, and that banks and brokerages caught up in the market turmoil may lose $1 trillion by the time it has passed.

Major U.S. investment banks this week announced yet another painful quarter amid the implosion of mortgage-backed securities and risky credit investments. Regional banks have scrambled to secure fresh capital to stay in business, and by Wednesday there was new talk that embattled investment bank Lehman Brothers might be forced into a sale.

With each passing quarter, Wall Street's top bankers have indicated that the worst of the market turmoil was over--only to face more pain months later. The uncertainty has caused already battered investors to lose confidence in financial companies, and expectations have increased that more layoffs, asset sales and capital raising will be needed in the weeks ahead.

The deepening credit crisis could cost the global financial system some $945 billion by the time it is over, according to a report from the International Monetary Fund. So far, banks and brokerages have written down nearly $300 billion from bad bets on mortgage-backed securities and other risky investments.

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Stocks drop on bank worries, FedEx profit warning

NEW YORK (AP)--Wall Street sank Wednesday for the second straight day on renewed concerns about the financial sector and FedEx Corp.'s warning that weakening demand and surging fuel costs would weigh on its profits in the coming year.

The Dow Jones industrial average finished down more than 130 points, after briefly dipping below the 12,000 mark for the first time since mid-March. All three major stock indexes finished down about 1 percent, as oil and bond prices jumped.

Unease about financials arose after several worrisome developments.