However, there is some concern that the bailout funds are being depleted rather quickly, said Jason O'Donnell, senior research analyst at Boenning & Scattergood.

"Investors are generally in favor of the emphasis on the capital purchase provisions," O'Donnell said. But, "we're down quickly to a small portion of total funds remaining for other purposes."

Paulson also announced a new goal for the program to support financial markets that supply consumer credit in such areas as credit card debt, auto loans and student loans. He said, "with a stronger capital base, our banks will be more confident" to support economic activity.

But investors are worried that a severe pullback in consumer spending, which drives more than two-thirds of the US economy, will prolong a global economic downturn.

Macy's shares fell $1.04, or 11 percent, to $8.37. Best Buy shares tumbled $1.91, or 8 percent, to $21.97.

The future of the country's top automakers remained a major concern on the Street as well, as investors waited to see whether the government would put together a bailout plan for General Motors Corp., Ford Motor Co. and Chrysler.

General Motors was the only gainer among the 30 Dow stocks Wednesday, rising 16 cents, or 5.5 percent, to $3.08. Ford gained 4 cents, or 2.2 percent, to $1.84.

Morgan Stanley, which converted into a bank holding company in September, said it plans to scale back its institutional securities business before the end of the year. The layoffs it plans are in addition to a 10 percent cut made earlier this year to the group.

Morgan Stanley also plans to restructure its money management business by cutting 9 percent of the group's work force. The securities firm employs about 44,000 people worldwide. Morgan Stanley shares fell $2.14, or 15.2 percent, to $11.94.

Meanwhile, American Express Co. is said to be seeking about $3.5 billion from the government to help boost its balance sheet, according to a report in The Wall Street Journal citing people familiar with the situation. AmEx, the No. 4 US credit card issuer, won approval Monday from the Federal Reserve to become a bank holding company, which gives it the ability to grow a large deposit base and access financing from the Fed.

AmEx shares dropped $2.35, or 10.5 percent, to $20.05.

Government bond prices, which did not trade Tuesday because of Veterans Day, moved higher as investors looked for safer investments. The three-month Treasury bill's yield fell to 0.16 percent from 0.22 percent late Monday, and the yield on the benchmark 10-year Treasury note fell to 3.67 percent from 3.76 percent late Monday.

Lower yields indicate stronger demand.

Crude dropped below $57 a barrel Wednesday on the growing realization that global economic growth next year will slow more than originally feared, cutting demand for crude products such as gasoline. Light, sweet crude fell $3.50, or nearly 6 percent, to settle at $56.16 a barrel on the New York Mercantile Exchange.

The dollar was mixed against other major currencies, while gold prices dipped.

Overseas, Japan's Nikkei closed down 1.29 percent and Hong Kong Hang Seng fell 0.73 percent. In Europe, London's FTSE 100 fell 1.52 percent, Germany's DAX fell 2.96 percent, and France's CAC-40 dropped 3.07 percent.

(China Daily via Agencies November 13, 2008)