Updated from 10:11 a.m. EDTU.S. stocks were slumping Wednesday as traders awaited the outcome of a Senate vote on the Bush administration's rescue package for the financial system. A bearish manufacturing report by the Institute for Supply Management was adding to investor pessimism. The Dow Jones Industrial Average was down 175 points to 10,675, and the S&P 500 dropped 21 to 1145. The Nasdaq gave back 39 points to 2053. During Tuesday's session, stocks posted large gains, partially recovering from a sharp selloff Monday. As the new day got underway, investors were still waiting for news on a $700 billion financial-sector bailout proposal rejected by the House of Representatives on Monday. The revised bill before the Senate includes a temporary increase in the Federal Deposit Insurance Corp.'s insurance on bank deposits to $250,000 from $100,000. The bill also extends existing tax breaks for individuals and businesses for two years. According to reports, the bill will temporarily let the FDIC borrow unlimited funds from the Treasury to further bolster its insurance of U.S. deposits. Such a move could help alleviate strains on banks, as depositors have increasingly reduced deposit levels to the current $100,000 FDIC insurance limit. Kenny Landgraf, president and founder of Kenjol Capital Management, said the increased FDIC protection will help alleviate the withdrawal of capital from financial institutions. After Wachovia ( WB) merged with JPMorgan Chase ( JPM) and Washington Mutual ( WM) failed, "the question is, who's next?" said Landgraf. "We need to go some period of time without some financial institution failing or being taken over. Investors are scared; I've never seen this level of fear." According to reports by The Wall Street Journal and Reuters, former AIG ( AIG) CEO Maurice Greenberg requested the opportunity to bid on the insurance company's assets. AIG, which has taken out an emergency bridge loan from the government as part of its effort to raise capital, was reportedly contemplating the sale of various assets to stave off a government takeover.