Stocks plunged on Monday as the US House of Representatives rejected a $700 billion financial sector bailout plan, renewing fear about frozen world credit markets and the global economy's health. The House vote shocked financial markets, which expected it to approve the Bush administration's rescue plan. The Dow at one point fell more than 700 points, its biggest intraday point decline ever, while the Nasdaq and S&P dropped more than 7 percent.
The Nasdaq was on course for its biggest one-day slide since the market reopened in the aftermath of the September 11, 2001, attacks.
"I can't believe they weren't able to come together and come up with a solution. Complete disaster was predicted if it didn't pass," said Stephen Berte, senior equity trader at Standard Life in Boston. "Everybody was expecting it to pass and it didn't pass. I can't see what the upside is right now."
House Republican leaders blamed what they called a partisan speech by House Speaker Nancy Pelosi (D-Calif.) for the surprise failure of the financial rescue bill in the House today.
House Minority Leader John Boehner (R-Ohio) said Mrs. Pelosi's closing speech on the House floor was "partisan" and that it "poisoned" the bill's chances of success. Roughly two-thirds of House Republicans voted "no," as did more than 90 Democrats. Rep. Roy Blunt (Mo.), the second ranking Republican in the House, said the Republicans thought they had a dozen more "yes" votes than were cast on the floor. He said the Republicans would reach out to find a solution to the problem that would pass on the House floor in the next few days.
Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said he was "appalled" by the assertion from House Republican leaders that Mrs. Pelosi was to blame for the failure of the bill.