ASIAN MARKETS FALL ON U.S BAILOUT FAILURE:Asian markets reacted to the rejection by U.S. lawmakers of a $700 billion bailout plan, the biggest proposed government intervention in the U.S. economy since the Great Depression of 1929. Overnight, the Dow Jones closed nearly 800 points down. Asian and Pacific stock markets sank in early trade on Tuesday after the U.S. House of Representatives failed to adopt a financial bailout plan, which triggered the largest point drop in U.S. market history.
The Hong Kong stock exchange opened nearly 5.5 percent down Tuesday.
The Japan's Nikkei Index was down 4.63 percent while the Australian Securities Exchange fell 3.4 percent.
The Korea Exchange in Seoul, South Korea, was down 3.47 percent.
The American stock market was down almost 778 points at closing -- just under 7 percent.
U.S. lawmakers in the House of Representatives on Monday voted against the biggest proposed government intervention in the U.S. economy since the Great Depression of 1929.
Government officials, Treasury chiefs and political leaders from both sides of the political divide thought they had agreed Sunday on the details of a $700 billion rescue plan that would prop up the nation's ailing financial system -- and be supported in the House of Representatives.
As it became apparent the vote was lost, the Dow Jones plunged.
Preliminary tallies had the Dow losing 777 points -- the worst single-day point loss ever, topping even the loss following the September 11 terrorist attacks.
Monday's plummet knocked out approximately $1.2 trillion in market value, the first post-$1 trillion day ever, according to a drop in the Dow Jones Wilshire 5000, the broadest measure of the stock market. However the 7 percent decline does not rank among the top 10 percentage declines.
Republicans and Democrats blamed each other for the result -- 205 to 228 against the bailout.
President George W. Bush was "very disappointed," his spokesman, Tony Fratto said. Bush will be meeting with his advisors and will be calling congressional leaders, Fratto added.
Treasury Secretary Henry Paulson said he will continue to work with congressional leaders to draft a plan that does pass.
Before the vote, Bush said the plan was of "tremendous importance to all Americans." Bailout explainer: What's in the bill?
The Democratic candidate for U.S. president, Sen. Barack Obama, blasted Congress for not passing a financial rescue package, while the Republican candidate, Sen. John McCain's campaign accused Obama and Democrats of putting "politics ahead of country."
A four-hour debate included impassioned pleas for and against the measure from Democrats and Republicans alike. Even some of those arguing for the legislation were quick to point out problems with it.
But the vote began with both Democratic and Republican leadership telling their members the only way to protect the economy from a spreading credit crunch was to vote for the difficult to swallow measure.
After the defeat, Republican leaders accused Nancy Pelosi, the Democratic speaker of the House, of giving a partisan speech which "poisoned" Republican support. Watch Republicans lay the blame at Democratic feet »
Pelosi said the $700 billion "is a number that is staggering, but tells us only the costs of the Bush administration's failed economic policies."
But Barney Frank, the top Democrat on the House Financial Services Committee, demanded: "Because somebody hurt their feelings, they decided to punish the country?" He said he did not think the Republican leadership was able to get enough colleagues to support the bailout and was diverting attention to Pelosi.
When leading House Republicans signed on to the proposal Sunday after earlier reservations, the bill was expected to pass.
