Wachovia, Citigroup and Wells Fargo on Monday agreed to a standstill of all formal litigation activity _ a sign that the banks and the Federal Reserve are working feverishly to reach an agreement over the fate of Wachovia.

European Central Bank President Jean-Claude Trichet called Monday for calm in the continent's jittery markets, saying they are overestimating risks and the euro-zone central bank stood ready to provide all the liquidity needed for as long as necessary.

Stock markets slumped worldwide Monday, some marking record one-day drops, on fears the global financial crisis will worsen and hit the wider economy despite bank bailouts in the U.S. and Europe.

The government's $700 billion rescue, aimed at rebuilding economic confidence, appeared to sound a global alarm instead on Monday, triggering a fearful international sell-off as the U.S. began work on a plan that investors feared would be too little and too late to stave off a worldwide recession.

Wall Street joined in a worldwide cascade of despair Monday over the financial crisis, driving the Dow Jones industrials to their biggest loss ever during a trading day. Even a big afternoon rally failed to keep the Dow from its first close below 10,000 since 2004.