Bailout Plan Fails; Stock Market Takes A Dive

The Dow is down more than 700 points.

By: The Associated Press | News Channel 7
Published: September 30, 2008

NEW YORK (AP) - Wall Street has ended a stunning session with a huge loss, with the Dow Jones industrials plunging more than 735 points - their largest point drop ever - after the failure of the financial bailout plan in the House.

Stunned traders on the floor of the New York Stock Exchange watched on TV screens as the House voted down the plan. And they saw stock prices tumbling on their monitors.

The plan's failure means no one knows how the financial sector hobbled by hundreds of billions of dollars in bad mortgage bets will recover. The credit markets remain close to frozen as banks are too afraid to lend - including loans to to other banks.

The Dow is down about 738 points at the 10404 level.

Bailout Blame Game Begins

WASHINGTON (AP) - First came the failure of the massive House bipartisan bailout package. Then came the finger-pointing.

Several Republican aides say House Speaker Nancy Pelosi ended any spirit of bipartisanship surrounding the bill with a scathing speech near the close of today's debate. Her remarks blamed President Bush for the current financial industry turmoil.

Without mentioning her by name, Florida congressman Adam Putnam said "the partisan tone at the end of the debate" affected votes for the measure. House Minority Leader John Boehner was
more specific, saying Pelosi's words "poisoned" the situation, alienating lawmakers they'd hoped would back the bill.

Massachusetts congressman Barney Frank scoffed at the idea. The Democrat who chairs the Financial Services Committee says if Pelosi's remarks "stopped people from voting, then shame on them." He said if a speech hurt their feelings then "they really don't belong here. They're not tough enough."

Treasury vows to protect financial markets

WASHINGTON (AP) - A Treasury Department official says Treasury Secretary Henry Paulson will do all he can to protect the financial markets and the economy after the House rejected a proposed $700
billion rescue bill for the financial system.

Treasury spokeswoman Michel Davis said Monday Paulson would be consulting with President Bush, Federal Reserve Chairman Ben Bernanke and congressional leaders on what next steps to take.

Stocks have plunged and investors have fled to the relative safety of Treasury bonds after the vote.

FDIC says JPMorgan's purchase of Wamu stands

WASHINGTON (AP) - The agency that seized Washington Mutual last week and brokered its sale to JPMorgan Chase for $1.9 billion says the deal stands whether the government's $700 billion banking
bailout proceeds or not.

Federal Deposit Insurance Corp. spokesman David Barr says Citigroup's $2.1 billion purchase of Wachovia -- also arranged by the FDIC -- hasn't closed yet.

The House on Monday defeated the proposed federal bailout. The plan would allow JPMorgan to sell WaMu's troubled mortgage-related assets to the government - at a profit.

Spokesmen for Citigroup, Wachovia and JPMorgan didn't immediately return phone calls seeking comment.