JIM LEHRER: The massive financial rescue plan hit a major roadblock in Congress today, and that sent Wall Street into a freefall.
The $700 billion bill was defeated in a vote of the U.S. House of Representatives.
Republican Leader John Boehner accused House Speaker Pelosi of injecting partisan politics into the process at the last minute. Pelosi denied that, and she said the jam-up could only be resolved with a bipartisan effort.
At the White House, President Bush expressed disappointment.
GEORGE W. BUSH, president of the United States: We've put forth a plan that was big because we've got a big problem. I'm going to be talking to my economic advisers after my meeting here with the president.
And we're working with members of Congress, leaders of Congress on a way forward. Our strategy is to continue to address this economic situation head on, and we'll be working to develop a strategy that will enable us to continue to move forward.
JIM LEHRER: Treasury Secretary Paulson met with the president after the House vote. He pledged to work with federal regulators to protect the financial markets.
But stocks on Wall Street plunged even before the House action. The Dow Jones industrial average suffered its largest point drop ever in a single day. It closed down more than 777 points at 10,365. And the Nasdaq fell nearly 200 points to close at 1,983. We'll have more on the financial rescue story right after this news summary.
Earlier in the day, market jitters cascaded through Asia and Europe on news several European banks needed government bailouts. Belgium, Luxembourg, and the Netherlands announced plans to bail out the banking and insurance giant Fortis. And in Britain, the government nationalized the mortgage lender Bradford & Bingley.
We have a report from Faisal Islam of Independent Television News.
FAISAL ISLAM, ITV News correspondent: Bradford & Bingley's headquarters in West Yorkshire is today government property, 3,000 staff feeling uncertain about the future.
DAVID MATTHEWS, Union Spokesman: The majority of the people affected here aren't big-time bankers. Many, many people working here are less than the national average wage.
FAISAL ISLAM: On Saturday, after a collapse in its share price, the first signs of deposits being withdrawn, a crucial downgrade of its credit rating, and dwindling buyer interest, the bank regulators struck preemptively, B&B no longer passed its key tests for fitness as a deposit taker, despite being relatively well-capitalized.
Nearly 200 branches and 20 billion pounds in savings deposits will be sold to the Spanish giant Santander for 612 million pounds.
Bank shares tumbled in Britain today as it emerged that they would pick up a total bill for interest alone at 500 million pounds annually.
This was also driven by one of the blackest ever days in history for banks across the world.
Across Europe, large financial institutions struggled with their funding in torrid credit conditions. Fortis has been saved by the Belgian, Dutch and Luxembourg governments injecting nine billion pounds into the group.
The German lender Hypo Real Estate will receive 27 billion pounds in state support.
The Franco-Belgian financial group Dexia saw its share price drop by a third until both governments said they were ready to stand behind it.
And Iceland's No. 3 bank Glitnir was effectively nationalized as the government today took a 75 percent stake in the group.
JIM LEHRER: Back in the U.S., Citigroup agreed today to buy out Wachovia's banking operations. Federal regulators brokered the deal, which will cost Citigroup $2.1 billion. Wachovia's problems were triggered by the troubled mortgage market.
In the presidential campaign today, both candidates urged Congress to keep working on the financial rescue plan.
In West Des Moines, Iowa, Republican John McCain said the legislation wasn't perfect, but the crisis needed action.
SEN. JOHN MCCAIN (R), Ariz.: Now is not the time to fix the blame; it's time to fix the problem. I would hope that all our leaders -- all of them -- can put aside short-term political goals and do what's in the best interests of the American people.
JIM LEHRER: In Westminster, Colorado, Democrat Barack Obama said he was still hopeful Congress would eventually approve the bailout, but in the meantime he urged patience.
SEN. BARACK OBAMA (D), Ill.: There are going to be some bumps, and trials, and tribulations, and ups, and downs before we get this rescue package done. It's important for the American public and for the markets to stay calm, because things are never smooth in Congress, and to understand that it will get done.
JIM LEHRER: Both candidates plan to return to Washington whenever the Senate votes on the rescue legislation.
A special prosecutor will investigate the firings of nine U.S. attorneys; Attorney General Mukasey made that announcement today. It followed a Justice Department inspector general's finding that the 2006 firings process was fundamentally flawed.
The primary blame was laid on former Attorney General Alberto Gonzales, but no unlawful conduct was alleged. We'll have more on this story later in the program.
Two more Americans have died in Iraq and Afghanistan. A U.S. soldier was gunned down while on patrol in Baghdad today. Yesterday, an Afghan police officer opened fire on U.S. troops in Afghanistan, killing one.
The separate U.S. death tolls in September were the same -- 23 -- in Iraq and in Afghanistan.
