U.S. stocks plunged on Wednesday for the third straight session as investors learned that the Treasury Department would not use a $700 billion economic rescue package to buy toxic bank assets, and several companies reported losses due to a fall in consumer spending. The Dow Jones industrial average ended the day down more than 400 points after a session that began with the news that Macy's Incorporated lost $44 million in the third quarter and saw sales fall more than 7 percent. Electronics retailer Best Buy cut its fiscal 2009 guidance on fears that consumer spending will erode even further, and Morgan Stanley announced plans to cut 10 percent of staff in its institutional securities group — its biggest business. Investors then reacted badly to a news conference with Treasury Secretary Henry Paulson who announced that the so-called Troubled Asset Relief Program would not focus not on buying assets, but would instead purchase stakes in banks and encourage them to resume normal lending immediately. Investors, who had hoped to see the government take on the poisonous assets, sent stocks down across the board. According to preliminary calculations, the Dow fell 411.30, or 4.73 percent, to 8,282.66. The broader Standard & Poor's 500 index dropped 46.65, or 5.19 percent, to 852.30, and the Nasdaq composite index fell 81.69, or 5.17 percent, to 1,499.21. The New York Stock Exchange composite fell 313.67 to 5,320.70, while the American Stock Exchange composite dropped 65.31 to 1304.50. The Russell 2000 ended the day down 29.49 at 452.80. The price of a barrel of light, sweet crude oil for December delivery fell $3.17 to $56.16
