JUDY WOODRUFF: The Federal Reserve Bank announced $800 billion in a new effort to jumpstart the economy. The central bank said it will spend $600 billion to increase the availability of home loans. Another $200 billion will go to stimulate credit card, auto, and student loan markets. We'll have more on the story right after the news summary.
Another 54 banks have gone on a problem list of institutions in trouble. That word came today from Sheila Bair of the Federal Deposit Insurance Corporation. She said the subprime mortgage meltdown is still taking its toll.
SHEILA BAIR, Chairman, Federal Deposit Insurance Corporation: The number of bank on the problem list as of Sept. 30 stood at 171, and their combined asset value was $116 billion. The upward trend in problem banks reflects the challenges many institutions are facing in this environment, but let me emphasize that, even amid these adverse conditions, most banks remain well capitalized, profitable, and sound.
JUDY WOODRUFF: Overall, the 171 institutions now on the list make up 2 percent of all the banks the FDIC insures. Bair would not speculate on how many of those might go under.
It turns out that the U.S. economy stumbled over the summer worse than first believed. The Commerce Department reported today that consumers scaled back spending by the most in 28 years. As a result, the gross domestic product shrank by 0.5 percent for the third quarter.
Separately, a Standard & Poor's Index found home prices fell more than 16 percent to the lowest level since early 2004.
Wall Street had an up and down day. The Dow Jones industrial average ended with a gain of 36 points to close at 8,479. The Nasdaq fell 7 points to close at 1,464.
The day's economic news sent oil prices back down today to settle below $51 a barrel.
President-elect Obama named his budget director today and outlined a future of spending cuts. Peter Orszag will be nominated to run the Office of Management and Budget. He currently heads the Congressional Budget Office.
Mr. Obama said he wants to go through the budget line by line to eliminate unneeded programs. He said voters want action.
PRESIDENT-ELECT BARACK OBAMA: I think it's important, given the uncertainty in the markets and given the very legitimate anxiety that the American people are feeling, that they know that their new president has a plan and is going to act swiftly and boldly.
I don't think that there's any question that we have a mandate to move the country in a new direction and not continue the same, old practices that have gotten us into the fix that we're in.
JUDY WOODRUFF: We'll have more on the president-elect's plans later in the program tonight.
The man who lost the presidential election lent a word of support today to the Obama economic team. Republican Sen. John McCain spoke in Phoenix, Ariz.
SEN. JOHN MCCAIN, R-Ariz.: I think that -- frankly, that Sen. Obama has nominated some people to his economic team that we can work with, that are well respected, and they -- I approve of many of them.
But that does not mean we won't have differences. That does not mean that we have -- doesn't mean we have philosophical differences. But now it's time for us to work together for the good of the country.
JUDY WOODRUFF: McCain said Republicans need to go back to being a party of fiscal discipline.
A tentative security deal between the U.S. and Iraq faced new challenges today one day before the Iraqi parliament votes. The main Sunni bloc said that it would support the agreement only if it is put to a national referendum. The announcement came as U.S. and Iraqi leaders lobbied lawmakers to vote yes tomorrow.
Afghan President Hamid Karzai demanded the U.S. and NATO set a deadline to end the war in his country. He told a U.N. delegation that otherwise Afghanistan will feel free to negotiate its own solution.
And officials in neighboring Pakistan voiced hope that their financial crunch will begin to ease. The International Monetary Fund approved an emergency loan of more than $7 billion on Monday.
Osama bin Laden's former driver is being transferred from Guantanamo Bay, Cuba, to his home country of Yemen. Today, the Washington Post reported that Salim Hamdan will be sent back within 48 hours. He'll be eligible for release there in January.
Last August, a U.S. military court convicted Hamdan of supporting terror and sentenced him to five-and-a-half years. He had already served more than five years at Guantanamo. We'll have more on that later in the program tonight.
