NEW YORK (AP) — Wall Street’s biggest 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.

Worries about even the safest investments intensified as Putnam Investments suddenly closed a $15 billion money-market fund after institutional investors quickly pulled out cash.

And the two remaining major Wall Street investment banks — Goldman Sachs Group Inc. and Morgan Stanley — were under siege.

President Bush canceled an out-of-town trip to stay in Washington and to 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.

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 25 points in whipsaw trading by early afternoon 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 to nearly $900 an ounce, up $45.

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.

Putnam Investments said its board voted to close the Putnam Prime Money Market Fund effective at the close of business Wednesday. Putnam will distribute all fund assets to institutional clients. The fund had required a minimum $10 million initial investment.

Putnam says the closure is not linked to the credit quality of the fund’s holdings, but is a reaction to “marketwide liquidity issues.” The money manager said investors pulled out money en masse Wednesday, even though the fund has maintained a safety benchmark of holding at $1 in assets for each dollar invested.

Putnam says the fund has no exposure to the financial firms Lehman Brothers, Washington Mutual or AIG.

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.

Goldman’s stock was down nearly 15 percent to $98.40 in afternoon trading, having lost nearly 70 percent of its value in two weeks.

In Washington, the president was to meet with economic advisers, including Paulson, over 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.”

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.

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.

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 billion 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.

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.