Stocks fall as gov’t unveils financial plan
Investors are turning skeptical about the government’s latest bank bailout plan.
The Dow Jones industrial average fell 280 points Tuesday as financial stocks led the market lower, reflecting Wall Street’s growing concerns about the government’s ability to restore the health of the banking industry.
Treasury Secretary Timothy Geithner announced a plan that the government says could mobilize well over $1 trillion in public and private support to get the frozen credit markets functioning again. It includes a government-private sector partnership to help remove banks’ soured assets from their books.
The new plan would also expand an effort to unclog credit markets that provide loans to consumers and businesses; funding for this effort would increase to $100 billion from $20 billion. The administration also announced that the program would be expanded beyond consumer and small business loans to provide aid to the troubled commercial real estate sector.
“The good news is they are going to spend a trillion dollars, the bad news is they don’t know how,” said James Cox, managing partner at Harris Financial Group.