Fears about money-market funds grew and more funds closed or struggled, as investors pulled money out of the generally conservative investment vehicles.

Boston-based Putnam Investments said it would close its $12.3 billion Prime Money Market Fund, which is offered to institutional investors, as of 5 p.m. Wednesday, and distribute its assets due to "significant redemption pressure." The fund has no exposure to Lehman Brothers Holdings Inc., Washington Mutual Inc. or American International Group Inc. at the parent-company level, Putnam said in a statement, but was closing due to a reaction to marketwide liquidity issues.

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