WASHINGTON — WASHINGTON - Jarred by new jobless alarms, Congress raced to approve legislation yesterday to keep unemployment checks flowing through the December holidays and into the new year for 1 million or more laid-off Americans whose benefits are running out.
The economic picture was only getting worse, if Wall Street was any indication. The Dow Jones industrials dropped more than 400 points for a second straight day, reaching the lowest level in more than five years, and the Standard & Poor's 500 index fell below lows established six years ago as it lost almost 7 percent.
And the $25 billion rescue plan for the auto industry, desperately sought by Detroit's beleaguered Big Three, collapsed yesterday as Congress drew the line at one more bailout and Democrats said they would not even consider it until the companies produce a convincing plan for rebuilding their once-mighty industry.
The Senate's voice vote on extending unemployment benefits followed yesterday's government report that laid-off workers' new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had surged past 10 million.
The White House, which had opposed broader legislation containing the benefits extension, urged passage of the new version and said President George W. Bush would quickly sign it.
As Congress prepared to leave town - perhaps for the year - there was no such resolution on helping the auto industry, a disaster in the making that could lead to hundreds of thousands if not millions more lost jobs.
The demise of the rescue - at least for now - left uncertain the fate of General Motors Corp., Ford Motor Co. and Chrysler LLC. The carmakers have been clobbered by lackluster sales and choked credit, and are battling to stay afloat through year's end.
Democratic leaders said they could return to Washington in mid-December to vote on rescue loans if the carmakers first present a plan on transforming and modernizing operations.
Discouraged by the stalemate over auto aid, investors sent the Dow Jones industrials down 445 points, or 5.6 percent. The decline brought the Dow's two-day drop to 873 points, or 10.6 percent, its worst two-day percentage loss since October 1987.
"The market was looking to see [the auto deal] resolved," said Paul Mendelsohn, chief investment strategist at Windham Financial Services. "The fact that it won't be addressed until Dec. 8 isn't helping, given the fact that economic conditions are so poor here.
