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Dow rises as markets digest rescue plan's rejection

Stock markets staged a small recovery today, following the unprecedented events of last night.New York's Dow Jones fell a total of 777 points - its biggest one-day drop ever - on news that US lawmakers had voted against the government's rescue plan for the financial services sector.Investor's lack of confidence in the banking system, which was putting severe strain on credit markets, had led to the treasury's attempted action.The bill would have led to the creation of a public bank to buy up some of the toxic assets currently held by financial firms.However, lawmakers shot down the rescue bill - arguing that its use of public money would leave the taxpayer overburdened.Today, the Dow rose by over 200 points, signalling that investors still retained hope that a government intervention is forthcoming.The consequences of it not doing so are dire, Peter Morici, professor of business at the University of Maryland, told the Guardian."Things are going to get so bad something will have to be done in the next few weeks," he said."Banks will sink, credit markets will seize, the economy will go into something much worse than a recession."

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