Stocks plummeted Monday afternoon, with the Dow's 777-point decline being the worst single-day point loss in history, after the U.S. House of Representatives rejected the Bush administration's $700 billion bank rescue plan. Congressional leaders said Sunday they had reached a compromise on the rescue plan, but the House of Representatives voted against the legislation on Monday. Stocks had fallen sharply ahead of the vote, and the selling accelerated on fears that Congress would not agree on a solution to fix nearly frozen credit markets. The tight credit conditions mean banks are hoarding cash, making it difficult for businesses and individuals to get loans. In addition to expectations for the rescue package, there also was news that troubled bank Wachovia had to sell its banking assets to Citigroup, and several European banks collapsed. Meanwhile, the Federal Reserve (Fed) and other central banks around the world announced steps Monday to make billions of dollars available to troubled banks. Citigroup is buying Wachovia's bank assets in a $2.2 billion all-stock deal that will see Wachovia keep its brokerage business. The deal calls for Citigroup to absorb up to $42 billion in losses. Wachovia shares fell 80 percent. Other banks stocks fell as well. Regional bank National City fell 61 percent on worries it could fail. Bank of New York fell 24 percent, Fifth Third Bancorp fell 38 percent, and Regions Financial fell 38 percent. Light sweet crude oil for November delivery plunged $11.10 to $95.79 on fears that a slowing global economy will continue to lower demand. The Dow Jones industrial average fell 777.68, or 7 percent, to 10,365.45, surpassing the nearly 685-point loss on September 17, 2001—the first trading day after the September 11 attacks. However, the 7 percent decline does not rank among the index's top 10 percentage declines. All 30 Dow components fell, including banks Citigroup and Bank of America and technology companies Intel, IBM, and Hewlett-Packard. The broader Standard & Poor's 500 index fell 106.21, or 8.8 percent, to 1,107.06. The technology-heavy Nasdaq composite index fell 199.61, or 9.1 percent, to 1,983.73. Apple shares fell 13 percent after analysts said the slowing U.S. economy will hurt the firm's profits. Shares of Cisco Systems and Dell also fell. The New York Stock Exchange composite index fell 683.28 to 7,207.09. The American Stock Exchange composite index fell 157.53 to 1,758.91. And the Russell 2000 index fell 47.07 to 657.72.
