Stocks Take Record Tumble, Down 777 Points

House Rejection Of $700B Rescue Plan Sparks Steep Nosedive On Wall St.; Dow Suffers Largest One Day Loss In History

(CBS/AP)  Wall Street watched Washington with shock and fear as the bailout package flamed out on Capital Hill.

And as that $700 billion financial rescue plan went down, the Dow went down like a sub, hurtling the Dow Jones industrials down nearly 780 points in its largest one-day point drop ever, reports CBS News correspondent Anthony Mason.

"Nobody could believe it," said Ted Weisberg of Seaport Securities. "The fact that it did not get done is just mind-boggling." The result on Wall Street was a history-making 777-point nosedive. The Nasdaq plunged almost 10 percent.

"Wall Street is of the view something needs to be done," said Steve Masocca of Pacific Growth. "Investors are of the view something needs to be done. And it didn't get done."

The financial crisis, meanwhile, continued to spread. Wachovia, burdened with bad mortgage loans, averted disaster by selling out to Citigroup. Cleveland based National City, hit by fears it could be the next victim, saw its stock plunge more than 60 percent today. Overseas economies also felt the reverberations, Mason reports. The British government had to seize a distressed mortgage bank. And the Belgian-Dutch bank, Fortis, was rescued in a $16 billion bailout.

"The clock is ticking," said economist Mark Zandi. "We need to have some relief very rapidly."

Zandi says the credit markets are still frozen, and Main Street could feel the effects within weeks.

"I've heard from numerous businesses that they're running out of cash to operate their everyday business," Zandi said. "So that means if they don't get relief from their bankers soon, in the next few days or couple of weeks, they will be laying off workers and shutting operations."

Among 160 companies in danger of defaulting over the next 12 months, according to Standards Poors are: United Airlines parent UAL; General Motors; Six Flags; and Trump Entertainment Resorts.

Meanwhile, the Federal Reserve pumped $630 billion into the global financial system Monday, flooding banks with cash, trying to keep the crisis from worsening, Mason reports.

Credit markets, whose turmoil helped feed the stock market's angst, froze up further amid the growing belief that the country is headed into a spreading credit and economic crisis.

Stunned traders on the floor of the New York Stock Exchange, their faces tense and mouths agape, watched on TV screens as the House voted down the plan in mid-afternoon, and as they saw stock prices tumbling on their monitors. Activity on the floor became frenetic as the "sell" orders blew in.

The Dow told the story of the market's despair. The blue chip index, dropped by hundreds of points in a matter of moments, and by the end of the day had passed by far its previous record for a one-day drop, 684.81, set in the first trading day after the Sept. 11, 2001, terror attacks.

The selling was so intense that just 162 stocks rose on the NYSE
and 3,073 dropped.

It takes an incredible amount of fear to set off such an intense reaction on Wall Street, and the worry now is that with the $700 billion plan fate uncertain, no one knows how the financial sector hobbled by hundreds of billions of dollars in bad mortgage bets will recover.

While investors didn't believe that the plan was a panacea, and understood that it would take months for its effects to be felt, most market watchers believed it was a start toward setting the economy right after a credit crisis that began more than a year ago and that has spread overseas.

"Clearly something needs to be done, and the market dropping 400 points in 10 minutes is telling you that," said Chris Johnson president of Johnson Research Group. "This isn't a market for the timid."

The plan's defeat came amid more reminders of how troubled the nation's financial system is - before trading began came word that Wachovia Corp., one of the biggest banks to struggle due to rising mortgage losses, was being rescued in a buyout by Citigroup Inc. It followed the recent forced sale of Merrill Lynch & Co. and the failure of three other huge banking companies - Bear Stearns Cos., Washington Mutual Inc. and Lehman Brothers Holdings Inc.; all of them were felled by bad mortgage investments.

And it raised the question: Which banks are next, and how many? The Federal Deposit Insurance Corp. has a list of over 110 banks that were in trouble in the second quarter, and that number surely has grown in the third.

According to preliminary calculations, the Dow fell 777.68, or 6.98 percent, to 10,365.45. The decline also surpasses the 721.56-point intraday decline record also set during the first trading day after the terror attacks. Still, in percentage terms, the decline remained well below the more than 20 percent drops seen on Black Monday of October 1987 and the Depression.

Broader stock indicators also tumbled. The Standard & Poor's 500 index declined 106.85, or 8.81 percent, to 1,106.42.

The technology-heavy Nasdaq composite index fell 199.61, or 9.14 percent, to 1,983.73.

[gop_will_win]

This is all the fault of Bill Clinton. Its he who should take the blame.

[billybobnob1]

If you want the TRUTH about the financial crisis watch this video. http://www.youtube.com/watch?v=H5tZc8oH--o

[twig221]

gop_will_win
Who was in control of congress for most of the Clinton years? As long as there is 1 democrat in Washington you people will blame him for everything that goes wrong. Try playing a new song.

[antoniof123]

This is all the fault of Bill Clinton. Its he who should take the blame.

Posted by gop_will_win at 10:56 AM : Sep 29, 2008

You are a prime example of why the GOP is being dismantled by the voter this election. You have spent all your energy on blame and in fact there is blame those that blame are the ones at fault.

For 6 years we watched a witch hunt on a great President. Now we are through with the likes of the GOP just like in the 1950''s when your kind was put in there place so it will be in the 2000''s.

Have a nice day.

[kaiyo4u]

Posted by DeckardBR at 11:03 AM : Sep 29, 2008

You are absolutely right. We should fire the Federal Reserve and start printing our own money and value our dollar against something that has value.

[timothyone-2009]

It really is Bill''s fault, he should have had the entire Bush family slaughtered while he had the power to do so.

[upto1947]

This is all the fault of Bill Clinton. Its he who should take the blame. What a dumn dumb. Only someone who is stupid would say thit. You need to leave the USA.

[upto1947]

Anyone that has a load with government''s should ask for the money to pay it. These people running yjigs for us are dumb and stupid.

[gop_will_win]

gop_will_win
Who was in control of congress for most of the Clinton years? As long as there is 1 democrat in Washington you people will blame him for everything that goes wrong. Try playing a new song.


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Posted by twig221
=========================
Oh when will you liberals ever take responsibility for your actions?

[andrew_693]

I wonder if iraq is so important now..... whatever is going to happen to the billions the repukeblicans were wasting there, whatever will happen to the new and improved body armor the high school dropouts are waiting for....... the insurgency will have a field day in a couple of months when they are left there with no supplies.

[missingamerica]

"Smith, I think we are in trouble. It would appear that the consumer engine that is the United States is not making any money because they have no jobs."

"Well, Barney, we did get AWFUL rich by using that cheap offshore labor and avoiding all of the nasty environmental laws in the U.S. Are you saying the jig is up?"

"Fraid so, Smith. The balloon is collapsing as America''s elite siphon off funds at the top and there are no jobs at the bottom to refill it."

"Oh, well, Barney. That is why we invested our personal funds in euros in 2006, is it not?"

"lollll...you are right, Smith. Still, I almost feel guilty...pshaw. Lets bag it and move to Monaco. What say?"

[andrew_693]

we should tax churches, there is a shatload of money to be made from them.

[gmcnally2]

Don''t sell your stocks. The uber-rich are trying to consolidate the wealth further at bargain basement prices. True wealth is not destroyed during these periods, assets are merely redistributed.

[omega40]

Let''s hope this is the beginning of the end of the "global economy". It should be obvious that it was never meant to benefit the working class of this country anyway.

[thevicar1]

Last guy who jumps, make sure you TURN OUT THE LIGHTS!!!

[missingamerica]

You should be happy, the Big evil corporations are going down and the government is going to Nationalize them. That what you wanted isnt it lib?

Posted by hillaryin012 at 11:38 AM : Sep 29, 2008


I can hardly wait for the Republican spin on this.

"This is the fault of the liberal voters! If they had just created money faster than we could steal it, this would never have happened!"

[omega40]

You should be happy, the Big evil corporations are going down and the government is going to Nationalize them. That what you wanted isnt it lib?

Posted by hillaryin012 a


More likely it is a predecessor to Bush''s dream, the North American Union. When the dollar finally collapses they can roll out the Amero.

[missingamerica]

More likely it is a predecessor to Bush''''s dream, the North American Union. When the dollar finally collapses they can roll out the Amero.

Posted by omega40 at 11:41 AM : Sep 29, 2008

lolll...I would not bet on that. Nations are worse than people are when it comes to the speed with which they shed "friends" who turn out to be losers.

[omega40]

lolll...I would not bet on that. Nations are worse than people are when it comes to the speed with which they shed "friends" who turn out to be losers.

Posted by ibsteve2u

True, but the way we the people are being manipulated, anything is possible.

[gop_will_win]

As for gop_will_win: get a life. The republican regime has fallen and we will not have to see it for at least 30 years. Go to your history of presidents and you will see every time a republican was president the economy went to $hit,then it was another 30 years before they could get in and lie enough to get elected again.




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Posted by Obiden08
===================
But we will. The American citizen will become fat and happy again and want more ice cream. That day will come again.

[missingamerica]

What is funny is when you look at the DJIA charts for closes between 1999 and today, and then look at an approximation (it told too many truths, so the Bushies quit publishing the data in 2005) of the M3 money supply at http://www.nowandfutures.com/key_stats.html.

Is like: Gee - where did all that money go? It ain''t in the market...

Them oil boyz who worked hand in hand with Detroit to keep us addicted to oil?

They deserve a major slice of the credit pie for this jam we are in.

But so do the "free trade" boyz, like Clinton and the other neoliberals - ''cuz an awful lot of money went offshore in those trade deficits...

Pretty funny....the Democrats and the Republicans finally found something they could work together at:

Destroying America.

[irreverent1-2009]

It appears there is little offered in this bill to rollback CEO pay and no relief for homeowners. I suggest sending a big Merry Christmas message to Wall Street by not spending wages on any thing other than neccesities. There should be a nationwide, Deal? uh, uh, NO DEAL!, campaign.

[biomegaly]

W said ''Requires a guarantee program''...W
''Bipartisan oversite''...W
''Failed executive no winfall clause''...W
''Expect it to be paid back''...W
''Will prevent economic damage to you and your community''...W

And we are suppose to believe him? Says who? Him?

[occams_taser]

Bush destroyed everything he''s ever run. Why should the USA be different?

[missingamerica]

Too bad demtards Biden and barackO had their collective heads up their collective obama - while the only REAL candidate - McCain - was warning the American people of this impending crisis long before it reared its ugly head...!

Posted by badaxmofo at 11:53 AM : Sep 29, 2008

lollll..you are so full of it.

The fact is even though I know that Clinton and the "free traders" helped to bring about this catastrophe, I STILL say vote Democrat straight down the line.

The reason? Simple: More Democrats have consciences than Republicans.

If Americans start starving, the Democrats will try to do something about it.

The Republicans would just pull their blinds so they didn''t have to be annoyed by seeing it.

[incog-nito]

This bailout does nothing to fix the underlying cause for the economic collapse: The continuing loss of jobs to outsourcing and the resulting loss of capacity for wealth creation. In other words, when Americans'' good paying jobs are being outsourced and replaced by lower-paying service jobs, people make less, spend less, and are forced to buy cheap imported goods. This in turn creates more demand for imported goods, and cause even more jobs to be outsourced. It''s a catch-22.

[john570-2009]

Let Wachovia and Citigroup drown. They both suck.

[hillary_ftw2]

They are nationalizing the wrong companies. Its the oil companies that should be nationalized. Oil is a strategic resource, critical to the economy and the security of the US. It should not be sold for profit. It should be a nonprofit service, like the post office.

Posted by rafterman1 at 11:50 AM : Sep 29, 2008

Comparably, if the oil business were run like the post office, oil would cost near $800 per barrel. Yeah, that would a great improvement!

[toshi43]

This ''crisis'' is the greatest manipulation of public fear and anxiety since Adolf Hitler came to power in the early Thirties. Once the stock market tanks, the mega-rich will buy up everything at rock-bottom prices and further consolidate their position as the true owners of the American economy, and all with the help of the poor taxpayer. This was a well thought-out plan from the very beginning, and from all appearances a successful one.

[missingamerica]

Comparably, if the oil business were run like the post office, oil would cost near $800 per barrel. Yeah, that would a great improvement!

Posted by Hillary_FTW2 at 12:01 PM : Sep 29, 2008

Why do righties always project results as if they were in the middle skimming as usual?

[hillary_ftw2]

Why do righties always project results as if they were in the middle skimming as usual?

Posted by ibsteve2u at 12:02 PM : Sep 29, 2008

I don''t know. Are you a rightie or was that a joke?

[old300d]

Listen to the people at home that will soon be voting or listen to the Wall street fatcats that pay them money to vote !

What to do ? ? ?

[hillary_ftw2]

ALL opinions and NO facts - typical libtard post


Posted by badaxmofo at 12:05 PM : Sep 29, 2008

Believe it or not, there''s very few liberals like myself on this board.

Most of them are radicaltards that hate God, yet worship the empty suit.

Either way, Hillary wins in 2012 and that''s all I care about.

[missingamerica]

ALL opinions and NO facts - typical libtard post

Posted by badaxmofo at 12:05 PM : Sep 29, 2008

lollll...hey, pal - your constant use of dreary insults like "libtard" just reinforces how correct I am in stating that more Democrats than Republicans have consciences - i.e., more Democrats know right from wrong and feel bad when they do wrong than Republicans.

You ARE a Republican, right? You sure talk like one.

[hillary_ftw2]

Too bad demtards Biden and barackO had their collective heads up their collective obama - while the only REAL candidate - McCain - was warning the American people of this impending crisis long before it reared its ugly head...!

Posted by badaxmofo at 11:53 AM : Sep 29, 2008

I think it''s hilarious to see Chris Dodd is still a free man. Hasn''t he been the Chairman of the Congressional Banking Commission for years now? And who was vice chairman? And why were they taking paychecks from F Mae and F Mac, and yet hold no blame?

What Chris Dodd try to clean up this mess is like watching a dog chasing its tail.

[missingamerica]

I think watching the neocons and neoliberals tell lie after lie after lie as if the American people are stupid is hilarious.

But, I suppose it keeps you busy - and so keeps you out of other mischief.

[jdsalinger12]

This is a very disturbing trend, but it should serve as a wake up call to all American investors. If you want to protect your money, you need to diversify and invest at least some of it overseas. These are hard times for American investing firms. I personally use offshore bank accounts and they have helped me with diversification and asset protection. If you want to read more on why offshore investing is smarter, feel free to visit my website.

Best,
Frank Miller
http://www.theoffshorebankaccount.com

[txlakeside]

bad .... history 101 Graham is a Repub. At the time both houses were run by a majority of Repubs. If clinton had vetoed it it would have been passed anyway ... DA!

[occams_taser]

Maybe we can finally drive a stake through the heart of neoliberalism and its evil twin neoconservatism and bury them both under a pile of worthless Enron, Lehman, and WaMu shares.

America is becoming a heavily armed Banana Republic. Has been trending that way for years.

[occams_taser]

You''re incorrect about Clinton and Gramm''s bill. It did NOT have a VETO-PROOF-MAJORITY. If Mr Couldn''t-Keep-It-Zipped had vetoed it, it would not have become law until George Dumya Bush was President. But most assuredly Dumya would have signed it in 2001.

Both parties are to blame. Certainly. But the GOP are more to blame because they LEAD on this and the Dems only follow.

[hillary_ftw2]

Every word that comes out of the mouths of McCain and Palin are lies, including "AND" and "THE".

Posted by johndevinejr at 12:23 PM : Sep 29, 2008

How about "IS"?

[hillary_ftw2]

In November we will take the White House, the Senate and the House and stop them.

Posted by johndevinejr at 12:29 PM : Sep 29, 2008

When you say "we", are you referring to radical Islam or the Weather Underground?

[redbds]

How about "IS"?

Posted by Hillary_FTW2 at 12:27 PM : Sep 29, 2008

No. They know what the meaning of "is" is.

[missingamerica]

In November we will take the White House, the Senate and the House and stop them.

Posted by johndevinejr at 12:29 PM : Sep 29, 2008

When you say "we", are you referring to radical Islam or the Weather Underground?

Posted by Hillary_FTW2 at 12:31 PM : Sep 29, 2008

lollll...you are corrupt, Hillary_WTF...

He is talking about America.

[usclimey]

But do it NOW, if you wait for the stampede, it will be much, much harder to get a Green Card and a job outside of the US.

Posted by prometheus41

About the only way for an American to get a work permit in Europe is to marry a European citizen. It''s a LOT tougher over there now.

[usclimey]

When you say "we", are you referring to radical Islam or the Weather Underground?

Posted by Hillary_FTW2

Getting desperate aren''t we.

[inventagod2]

Rich Greedy Bassturds...

[beehive21-2009]

The Stock Markets here,and everywhere else are falling,looks like everyone sees a scam ,Congress ,better,also.

[inventagod2]

Bu$hies have lied every day so far - nothing different here...
They have only learned how to grab the $$$ better than B4...

[bigal321321]

Much like the crash of 29 this time around it will become the biggest "heist" of the American People''s money ever. Another way to look at this politically is that after they sweep us into a major recession they leave the incoming new President with little or no financial power. Pretty sneaky, eh? He can forget about any changes he had in mind. It will now HAVE to be business as usual in DC.

Quick reminder of the definition of DC: 88 square miles surrounded by reality.