Stocks Fall After Bush Announcement

Wall Street didn't take kindly to the economic stimulus plan announced earlier today.

Wall Street resumed its downward trek Friday as skittish investors, unable to hold on to much optimism about the economy, drew little comfort from President Bush's stimulus plan.

Investors had already pulled back from a big early gain, with the major indexes trading mixed as Bush began to speak. By the time the president finished announcing a plan for about $145 billion worth of tax relief, the indexes were well into negative territory.

"It's disappointed in the size of the economic growth package. Wall Street's showing its displeasure," said Kim Caughey, equity research analyst at Fort Pitt Capital Group in Pittsburgh. "Honestly, I think the institutional investors understand the limits to the government's ability to enact economic change."

The Dow Jones industrial average, up more than 180 points in morning trading, was down 85.11, or 0.70 percent, at 12,074.10. The Dow plunged 306 points Thursday amid deepening pessimism about the economy.

The broader Standard & Poor's 500 index fell 15.40, or 1.16 percent, to 1,317.85, while the technology-focused Nasdaq composite index fell 10.38, or 0.44 percent, to 2,336.52.

Bush Announces Economic Stimulus Plan

This just in.

President Bush on Friday called for about $145 billion worth of tax relief to stimulate a sagging economy and fend off a possible recession.

Bush said that to be effective, an economic stimulus package would need to roughly represent 1 percent of the gross domestic product — the value of all U.S. goods and services and the best measure of the country's economic standing. White House advisers say that, in current terms, 1 percent would amount to around $145 billion, which is along the lines of what private economists say should be sufficient to help give the economy a short-term boost.