Euphoria in the financial markets about Hank Paulson's plan to buy toxic debts faded today with the Dow Jones falling 372 points or 3.27%. The S&P 500 dropped 3.8%.
The bailout has to be ratified by Congress where it has been met with incredulity and a desire to load up the legislation with additional items. Help for subprime mortgage holders and regulation on executive bonus are seen as hot items by many Democrats.
In other markets the oil price spiked to close $16 up at more than $!30.
Bank of America, Citigroup, Merrill Lynch and Wachovia all traded lower as investors continued to shun financials. Morgan Stanley kept above water following Mitsubishi UFJ taking a stake.
Goldman Sachs and Morgan Stanley both made the historic decision to become bank holding companies. This enables the banks to take deposits and have access to Federal funds.
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