Bailout defeat drives Dow down 700 points
Panic seized Wall Street this afternoon, with stocks, oil and other investments plummeting as the House of Representatives surprised investors and architects of the $700-billion bailout crafted over the weekend by failing to pass the rescue package for the troubled financial industry. The Dow Jones Industrial Average nosedived as much as 705 points as House leaders held the vote open for several minutes in hopes of reversing the 228 to 205 vote against the compromise plan drafted by congressional leaders and the White House over the weekend. By 3:30 pm, the Dow remained down nearly 700 points.
Tampa Bay area stocks were broadly hurt by the sharp downturn, with financial shares sustaining the most damage. Alabama-based Regions Financial plummeted nearly 30 percent, part of a broad-based downswing by regional banking companies in the wake of this morning's FDIC-assisted purchase by Citigroup of Wachovia Corp.'s banking assets. The deal turns Citigroup into a $1.3-trillion-deposit institution and makes it one of the biggest banks operating in Florida.
Also stung Monday were shares of SunTrust, down more than 14 percent, BB&T, off more than 9 percent, and Bank of America, off 11.4 percent. Non-financial companies also took their hits with St. Petersburg's Jabil Circuit down more than 16 percent, Home Shopping Network, recently spun off as a public company, down 15.5 percent, and Tampa's once-high-flying Walter Industries off more than 20 percent.
-- Robert Trigaux, Times Business Columnist