Republican revolt sinks stocks

Share prices plunged 777.68 points on Wall Street overnight, it’s biggest points fall ever.

That occurred after Republicans revolted and rejected their president’s plea for a $US700 bail out for the US financial sector.

The vote, in the US House of Representatives was 228-205.

The S&P 500 fell 106.85 points to 1,106.42.And the tech-heavy NASDAQ Composite index plunged 199.61 points to 1.983.73.

Oil futures also sank sharply, dropping $US11.43 to $US95.46.

The Republicans, who rejected the plan President Bush had urged them to accept, declared that they did not believe it would work.

But President Bush admitted his disappointment.

“We put forth a big plan, because we had a big problem,” he said.The meltdown forced the  US Federal Reserve to pour hundreds of billions of dollars into money markets, to bolster liquidity.

Australia, too, became more deeply involved overnight, when the Reserve Bank agreed with the Federal Reserve on a $US20 billion expansion of the previously existing swap line, to boost US dollar liquidity in Australia.

This is in addition to the $US10 billion swap line announced, ,for the same purpose, on September 24.

This was part of a world-wide protective move, involving eight other central banks, including those of  Japan, England, Europe and Norway.

Meanwhile America moved closer to the Australian banking system overnight, with the imminent sale of the Wachovia bank.

Citigroup beat off its rival,  Wells Fargo, overnight to make the purchase.

The concentration of US banks, caused by collapses in the current crisis, looks like leaving America with just three dominant players in that nation’s banking market.

They would be the Bank of America, JP MOrgan Chase and Citigroup.