Dow Plunges 777 as House Rejects Bailout

In an attempt to bolster money markets, the Fed announced it would expand its lending facility for banks and swaps for foreign banks.

A report in The Wall Street Journal said that private equity companies Bain Capital and Hellman & Friedman were in the hunt to buy the Neuberger Berman arm of bankrupt brokerage Lehman Brothers.

Meanwhile, Morgan Stanley got a $9 billion investment from Japanese bank Mitsubishi UFJ. Shares dropped 15% to $20.99.

The Financial Times reported that insurance firm AIG (AIG Quote) was contemplating the sale of 15 of its businesses to repay an $85 billion bridge loan from the Federal Reserve and keep from being taken over by the government. AIG fell 21% to $2.50.

Shares of National City (NCC Quote) were dropping precipitously, losing 63% to $1.36 as investors feared it may be the next bank to fall.

The credit crisis was also causing turmoil overseas. European governments early Monday arranged rescues of Bradford & Bingley, Fortis and Hypo Real Estate.

Looking at the day's earnings, electronics retailer Circuit City (CC Quote) reported a wider second-quarter loss and withdrew its previous 2009 earnings forecast. The stock gave back 21% to $1.08.

Pharmacy chain Walgreen (WAG Quote), meanwhile, reported profit that rose 13% year over year on strong revenue. Shares stumbled 5.3% to $31.00.

In the pharmaceutical sector, ImClone (IMCL Quote) was still in talks to sell itself to a large drugmaker following a hostile takeout bid from Bristol-Myers Squibb (BMY Quote). ImClone slipped 2.2% to $61.96, and Bristol-Myers Squibb skidded 4.7% to $19.85.

As for economic data, the Department of Commerce said that in August, personal incomes rose 0.3%, up from a 0.7% decrease in July and above economists' estimates. Personal spending was flat in August, falling short of analyst predictions of 0.2% growth.

In the commodities space, the price of crude oil declined $10.52 to $96.37 a barrel, and gold was gaining $18.10 to $912.50 an ounce.

Longer-dated U.S. Treasury securities were sharply rising in price as investors sought safety from the credit crisis. The 10-year note was up 2-4/32 to yield 3.59%, and the 30-year was gaining 4-5/32, yielding 4.13%. The dollar was rising sharply against the euro and pound but falling vs. the yen.

Overseas exchanges, including the FTSE in London and the Dax in Frankfurt, were taking losses. Asian indices such as the Nikkei in Japan and the Hang Seng in Hong Kong closed on the downside.

Where will the Dow Jones Industrial Average stand at the end of 2008?
	Above 10,000 9000-10,000 8000-9000 7000 to 8000 Below 7000