Wall Street moved lower but off the worst level Friday, as apparent bailout plan fell through and Washington Mutual Inc., one of the U.S. largest banks, was seized by the Federal Deposit Insurance Corp..
The setback of the 700 billion U.S. dollars bailout plan unnerved investors. A group of House Republicans declined to support the proposed rescue plan by Treasury Secretary Henry Paulson Thursday, not long after key lawmakers of both parties declared they'd reached fundamental agreement on the government's proposed 700 billion dollars bailout plan. Financials tumbled in early trading.
However, stocks rebounded from the day's lows after U.S. President George W. Bush predicted lawmakers will reach a deal on the government's bailout plan.
Investors also seemed unease after the Federal Deposit Insurance Corp. seized Washington Mutual on Thursday and sold its branches and assets to JPMorgan Chase for 1.9 billion dollars. It was the largest U.S. bank failure in history. JPMorgan Chase also announced that it would raise 8 billion dollars in new capital from sale of common stocks.
Meanwhile, an economic report signaling economic slowdown weighed on the market. The U.S. Commerce Department reported Friday that gross domestic product, or GDP, increased at a 2.8 percent annual rate in the second quarter. That fell short of the 3.3 percent growth estimated a month ago. General Electric led industrials down.
The Dow Jones fell 16.16 to 11,006.37. Broader indexes also moved lower. The Standard & Poor's 500 index dipped 10.17 to 1,199.01 and the Nasdaq fell 27.33 to 2,159.24.