Uneasy Street

Panicky sell-off drags the Dow under 9,000

"At a maximum," she continued, "you can get general principles - the need for a swift recapitalization of the banks, the need for liquidity - so we don't get an even bigger credit crunch."

The White House confirmed that the Treasury Department was considering taking ownership positions in banks as part of its $700 billion rescue package. But officials said the idea was less developed than the plan to buy distressed assets from banks through "reverse auctions."

The goal, Treasury officials said, is a plan that would be broadly available to all banks, rather than through specific rescue packages negotiated on a case-by-case basis. That makes it likely that the government could afford to take only a small stake in any single institution.

The Treasury proposal to recapitalize banks stems from the realization that as the stock market keeps tumbling, and as mortgage-related securities on banks' balance sheets also plummet, it has become harder for banks to raise fresh capital from investors.

After the market closed, the White House said Americans should remain confident despite the market plunge, and Bush planned to speak from the Rose Garden this morning - though he was not expected to unveil any new policy proposals.