Market watchers hoped that last night's late-night session in the Capitol would be able to make enough progress to soothe fears created by the failed White House meeting earlier in the day. When negotiators emerged to say that House Republicans were still a major obstacle before an agreement, those hopes dimmed.
And when we say market watchers, we're not just referring to Wall Street analysts: reporters and senior aides alike, waiting outside the meeting, hoped aloud for some soothing words to emerge from the meeting to calm the market and a rocky evening.
But when Sen. Lindsey Graham (R-S.C.), a top surrogate for Sen. John McCain (R-Ariz.), said that the "Paulson plan is dead," those hopes grew even dimmer.
By midnight, Dow futures -- an indicator of how the market will open in the morning, were down nearly 200 points and stand down about 1.1 percent as of this posting. Asian trading was also off sharply, on fears that the deal had collapsed.
Perhaps with that in mind, however, Graham went on TV this morning with some encouraging words. "We are very close," he said. We'll know shortly if it's enough to calm jittery investors, reeling from the failut of not just the bailout talks but the collapse of Washington Mutual -- America's largest bank failure in history.
Yesterday, Wall Street watched Washington by the minute in hopes of some hint at how negotiations were going. Today, Washington will be watching Wall Street to find out the impact of its high-profile breakdown in talks.