NEW YORK (AP) - The worst global financial crisis since the Great Depression forced the Federal Reserve and central banks in other countries to pump billions of dollars into the world's banking system in an urgent bid to stop further damage.

The Fed plowed as much as $180 billion into money markets overseas. At home, the New York Federal Reserve acted to ease a spike in overnight lending rates by injecting $55 billion into the banking system.

Wall Street initially rallied, but it shed the gains and traded mostly lower by midday. Treasury securities and gold soared as investors fled to their relative safety.

President Bush canceled an out-of-town trip to stay in Washington and huddle with Treasury Secretary Henry Paulson. Bush pledged to do all that was necessary to stem the crisis, whose fallout threatens the already fragile economy.

"The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence," Bush said.

On Capitol Hill, lawmakers in both parties are becoming increasingly vocal about their concerns with the Bush administration's handling of the crisis.

Administration officials refused to attend a closed-door briefing with House Republicans Thursday morning, said Rep. John A. Boehner of Ohio, the GOP leader, leaving their congressional allies in the dark about recent actions to prop up insurer American International Group Inc. and whether further bailouts might be on the horizon.

"We are a separate branch of our government. (Lawmakers) are entitled to information, and I understand that there's a lot of sensitive talks underway - this is unprecedented - but having said that, members of Congress have a responsibility to their constituents and to the American taxpayers to have a better understanding of what's happening," Boehner said.

Republican presidential candidate John McCain said that if he were president, he would fire Securities and Exchange Commission Chairman Christopher Cox.

The move by the Fed and its overseas counterparts was aimed at boosting waning confidence and getting banks around the world to open their ever-tightening purse strings. Banks have been increasingly reluctant to lend to each other as distrust spread throughout the financial system.

A sharp rise in borrowing costs has worsened as bad bets on dodgy mortgage-backed securities claimed more Wall Street giants. The total amount of commercial paper fell by $52.1 billion for the week that ended Wednesday, as banks cut back the short-term loans companies from small garment factories to General Electric Co. depend on for their daily operations. At the same time, the interest rate on those short-term loans more than doubled, with rates for seven-day paper jumping to 4.5 percent from 2.5 percent.

Asian stocks closed lower. European shares rose, but struggled to maintain the gains.

Russia closed its stock exchanges for a second day Thursday as President Dmitry Medvedev pledged a 500 billion ruble ($20 billion) injection into financial markets to stem a dizzying plummet in share prices - and quash fears of a repeat of the country's 1998 financial collapse.

The Dow Jones industrials slipped about 13 points in midday trading Thursday after dropping 450 points Wednesday when a Fed bailout of American International Group Inc., one of the world's largest insurers, failed to settle the markets' frayed nerves. About $700 billion in investments vanished and trading volumes set new records Wednesday.

Investors were dumping their money into 3-month Treasury bills, considered one of the safest investments around. Gold prices spiked near $900 an ounce.

Demand for super-safe Treasuries surged Wednesday, sending the yield on the 3-month Treasury bill briefly into negative territory for the first time since 1940. That meant investors were willing to pay more for certain Treasury securities than they expected to get back when the investments matured, a rare event.

Worries that other financial companies could fail cast a pall on the central banks' step, however.

Morgan Stanley's stock price plunged again Thursday as the investment bank scrambled to strike a major deal or raise more cash that will reassure investors and prevent more damage to its free-falling shares.

John Mack, CEO of the bank - now one of only two large standalone investment banks - reached out to China's Citic Group overnight about a possible investment, according to a person familiar with the talks. Morgan Stanley is also considering a combination with retail bank Wachovia Corp. and an investment from Singapore Investment Corp., one of the world's biggest sovereign wealth funds, said the person, who spoke on the condition of anonymity because the discussions were still ongoing.

In Washington, the president was to meet with economic advisers, including Paulson, throughout much of the day. "Our financial markets continue to deal with serious challenges," Bush said. "As our recent actions demonstrate, my administration is focused on meeting these challenges."

Sen. Chris Dodd, D-Conn., the Banking Committee chairman, was peeved when Paulson twice canceled appearances he was to have made before the panel this week. Senators will have to wait until Tuesday to hear from the Treasury secretary and Bernanke on the financial meltdown.

A group of House GOP conservatives circulated a letter to Paulson and Bernanke calling on them to "refrain from conducting any additional government-financed bailouts for large financial firms.

"Regardless of the precautions taken, the risk to taxpayers and to the long-term future health of our economy remains just too great to justify," wrote the group, led by Rep. Jeb Hensarling, R-Texas.

Asked by lawmakers Tuesday if they could promise there would be no more government rescues of major financial institutions in the wake of the bailout for AIG, Paulson and Bernanke refused to commit, said several sources familiar with the conversation. They spoke on condition of anonymity because the meeting was private.

The Fed said it had authorized the expansion of swap lines, or reciprocal currency arrangements, with the other central banks, including amounts up to $110 billion by the ECB and up to $27 million by the Swiss National Bank.

The Fed also said new swap facilities had been authorized with the Bank of Japan for as much as $60 billion; $40 billion for the Bank of England and $10 billion for the Bank of Canada.

All told, Fed action increased lines of cash to central banks by $180 billion to $247 billion.

For more than a year, investors around the world have watched with growing alarm as the U.S. economy, the world's largest, has struggled to right itself before being tipped over the edge by massive foreclosures, shrinking consumer spending and rising inflation.

The turmoil has swallowed some of the most storied names on Wall Street. Three of its five major investment banks - Bear Stearns, Lehman Brothers and Merrill Lynch - have either gone out of business or been driven into the arms of another bank.

The two remaining - Goldman Sachs Group Inc. and Morgan Stanley - were under siege.

After the government bailed out the insurer AIG and a money fund "broke the buck," investors were worried about the riskiness of most assets.

It was the fourth consecutive day of extraordinary turmoil for the American financial system, beginning with news on Sunday that Lehman Brothers, would be forced to file for bankruptcy.

The 4 percent drop Wednesday in the Dow reflected the stock market's first chance to digest the Fed's decision to rescue AIG with an $85 billion taxpayer loan that effectively gives it a majority stake in the company. AIG is important because it has essentially become a primary source of insurance for the entire financial industry.

Jobs, too, have been affected by the tighter credit. With banks unwilling to lend, businesses are reluctant to expand. New applications for unemployment benefits rose last week, although much of that increase was due to the impact of Hurricane Gustav, the Labor Department said Thursday.

But the four-week average of new claims, which smooth out fluctuations, rose by 5,000 to 445,000. Economists consider initial claims above 400,000 a sign of a struggling economy. A year ago, the figure stood at about 320,000.

Wednesday, the Treasury Department, for the first time in its history, said it would begin selling bonds for the Fed in an effort to help the central bank deal with its unprecedented borrowing needs.

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Associated Press Writers Catrina Stewart in Moscow, Matt Moore in Frankfurt, Ellen Simon in New York and Julie Hirschfeld Davis in Washington contributed to this report.

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