Stocks plunge amid anxiety over bailout

Volatility again swept the financial markets Monday as investors grew nervous about a government plan to buy $700 billion in banks' mortgage debt.

Stocks fell sharply, taking the Dow Jones industrials down more than 370 points. Investors sought safety in hard assets, such as gold and oil, which at one point shot up more than $25 a barrel.

Gold jumped more than $40.30 to settle at $909 an ounce.

The dollar skidded lower, contributing to oil's surge, while the credit markets were still uneasy but not showing the frantic trading they saw last week.

While investors last week were relieved that federal authorities were constructing a plan to relieve the nation's banks of their toxic assets, many weren't waiting for the details to emerge before seeking safety.

Wall Street is not sure how successful the plan might be in unfreezing credit markets, which many businesses depend on to fund day-to-day operations, and for propping up the still-weak housing market.

Bush administration officials and congressional leaders have been meeting on the rescue plan, the thrust of which congressional leaders have endorsed. Many market observers hope for details to emerge by midweek, and delays could weigh further on investor sentiment.

“We need to have confidence built,” said Rob Lutts, chief investment officer at Cabot Money Management Inc. in Salem, Mass. “This government opening of the checkbook – it's a stopgap measure that will calm people and help us buy a little bit more time but ultimately what we need to see is more confidence.”