The Dow declined 196.33 points after lawmakers said a US$14bn plan to
rescue the nation’s auto industry lacked the votes to pass the Senate and initial jobless
claims jumped to a 26-year high.
The White House weighed in just before the vote with a public endorsement aimed at Republicans sceptical of the rescue and demanding a tougher approach for helping General Motors Corp, Ford Motor Co, and Chrysler LLC.
WHAT WILL HAPPEN TO OUR PROTON?
"We believe the legislation developed in recent days is an effective and responsible approach to deal with troubled automakers and ensure the necessary restructuring occurs," White House spokeswoman Dana Perino said in a statement.
Democrats advocated passage based on the belief that government inaction could lead to an industry collapse that would cost taxpayers far more than the loans intended to see them through March and help them restructure.