Many companies over the past week have said they are cutting back spending, building up reserves, and shifting their financing methods as loans become scarcer and more expensive.
Investors' aversion to risk could even accelerate as more companies and governments default on their debt. Through last Wednesday, 75 companies around the world defaulted, affecting debt worth $226 billion, Standard & Poor's said Wednesday. That is up significantly from 22 defaults in all of 2007 and 30 in all of 2006.
And Wednesday, Pakistan went to the International Monetary Fund for aid to avoid defaulting on billions of dollars in loans. The nation is facing high energy prices, decreasing foreign investment and rising militant violence.
