The worst financial crisis in 80 years had a significant impact on emerging markets on Wednesday, leading to emergency actions by central banks and calls for international assistance to prevent investors from fleeing. In the United States, companies such as AT&T Inc, Boeing, and drugmaker Merck & Co reported weaker-than-expected earnings and announced significant job cuts. Wachovia Corp, a struggling US bank being acquired by Wells Fargo & Co, reported a record third-quarter loss of $23.9 billion. Emerging market stocks, sovereign debt, and currencies all faced intense pressure as investors liquidated positions due to concerns about the global economy. Despite efforts by authorities worldwide to stabilize the financial system, fears of a global recession loomed large. Hungary raised interest rates significantly to protect its currency, the forint. Belarus requested assistance from the IMF, while Ukraine's Prime Minister anticipated receiving substantial financial aid from the IMF. The IMF is also prepared to assist Pakistan and Iceland, which are facing financial challenges. Neil Dougall, chief economist at Dresdner Kleinwort, noted that capital is now flowing back from emerging markets to developed markets. Despite the problems, officials expressed optimism about the financial crisis, which has led to significant rescue efforts from governments worldwide. U.S. Treasury Undersecretary David McCormick stated that the economy may start to recover late next year, emphasizing the need to restore confidence in the financial market. Mervyn King, governor of the Bank of England, suggested that the worst may be over for the financial system, following discussions among Group of Seven nations. He mentioned on Tuesday that we still have a long way to go before achieving stability, but he believes that the plan to strengthen our banking system, both domestically and internationally, will be remembered as a turning point in the banking crisis of the past year. The decrease in U.S. dollar short-term funding costs in London and Asia indicates that banks are starting to rebuild trust in each other. Russia, a growing force, has also shown signs of progress in bank lending, with interbank lending now functioning normally. The rates are decreasing after reaching high levels, with banks beginning to lend to sectors once more. However, it will take two to three weeks for the situation to show signs of improvement, according to First Deputy Prime Minister Igor Shuvalov as reported by the Financial Times. Despite progress in combating financial collapse, there is a prevailing concern about the worsening global economic conditions. Minutes from the Bank of England's recent meeting revealed a significant deterioration in the UK economy, with Governor King suggesting that the country may be on the brink of its first recession in 16 years. Financial markets were hit with concerns, causing Wall Street to anticipate a negative start with Dow Jones industrial average futures dropping by 259 points, or almost 3 percent. European shares also fell by over 4.4 percent, while Japan's Nikkei average closed down by 6.8 percent. Emerging markets saw MSCI's sector index drop to its lowest point since June 2005, and sovereign debt spreads widened to more than 700 basis points over Treasury yields for the first time since early 2003. Currencies, excluding the forint, were also impacted, with the Turkish lira reaching its lowest value in over two years and South Africa's rand hitting its lowest point in more than 6 years against the dollar. Sanjay Mathur, an economist at the Royal Bank of Scotland in Singapore, stated that they will need to address the challenges of a business cycle downturn, which is likely to be quite severe. A variety of US company reports on Wednesday provided a glimpse of the state of different industries and sectors in the largest economy in the world. Despite this, tobacco companies Philip Morris International and Reynolds American Inc, as well as fast-food chain McDonald's Corp, reported quarterly profits that exceeded analysts' expectations, offering some positive news amidst the overall negative outlook.