U.S. Mulls Expanding Rescue to More Firms

The Treasury Department is considering using more of its $700 billion rescue fund to buy stakes in a broad range of financial companies, not just banks and insurers, the Wall Street Journal reports.

Bond insurers and specialty finance firms such as General Electric's(GE Quote) GE Capital unit and CIT Group (CIT Quote) would be the focus, the Journal reports, citing people familiar with the matter.

Treasury Secretary Henry Paulson in September unveiled a plan to buy up hard-to-sell assets of financial institutions such as mortgage-backed securities. But that proposal has yet to begin running, and the department may scrap part of that early plan -- purchasing assets through an auction process -- and instead purchase some of the distressed assets directly, the newspaper reports. ...