US shares plunge over fears $700bn rescue deal

| October 2, 2008 | 0 Comments

US shares have fallen today after investors are concerned over the US $700 billion (£380 billion) rescue package.

Earlier this morning, it was announced that the US Senate voted in favour of a new version of the $700 billion (£380 billion) bailout plan.

The revised scheme will now go back to the House of Representatives tomorrow. Despite the US Senate voting in favour, there is still no guarantee that the House will follow suit and this has reflected on US stock markets today.

On Wall Street, the Dow Jones index was down 271 points or 2.5%, while the UK’s FTSE 100 closed down 1.8% at 4,870.3 points. Germany’s Dax index lost 2.5% and France’s Cac 40 shed 2.3%.

The new approved version includes sweeteners such as tax breaks for families and businesses, as well as raising the amount of savings guarantee from $100,000 to $250,000, which has been designed to win the approval of doubters.

Senator Harry Reid expects the House of Representatives to approve the bill. Meanwhile, President George W. Bush said that the package has been designed to prevent financial meltdown and is essential to the financial security of every American.

According to economists, investors are worried about the efficiency of the rescue package.

Meanwhile, there was further bad news after data from the US Labour Department showed that the number of people filing for new unemployment benefit claims rose to a level not seen since September 2001.

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