New York - US stocks fell sharply on Wall Street's opening bell Wednesday after the Federal Reserve agreed to make an 85-billion- dollar emergency loan to struggling insurance giant American International Group Inc (AIG).

The Dow Jones Industrial Average fell more than 200 points, some 2 per cent, within minutes of trading. The broader Standard & Poor's 500 was down as much as 25 points.

Shares in financial firms were among the worst performers to start the day.

The US central bank late Tuesday agreed to make a two-year, 85- billion-dollar bridge loan to AIG and will take a controlling stake in the company, which had been threatened with insolvency if it could not raise the needed capital.

But the lifeline left some investors concerned just how many more companies could be in a similarly dire position amid an ongoing credit crisis in the United States.

The Dow plunged more than 500 points, or 4.1 per cent, on Monday, and the S&P 500 4.7 per cent in the worst trading day since the September 2001 terrorist attacks. Both recovered about one fourth of their losses on Tuesday. (dpa)