WALL STREET - Volatility swept the financial markets again Monday as investors grew nervous about an amorphous government plan to buy $700 billion in banks' mortgage debt. Stocks fell sharply, taking the Dow Jones industrials down more than 370 points, while investors sought safety in hard assets such as gold and oil, which at one point shot up more than $25 a barrel.
The credit markets were still uneasy but not showing the frantic trading they saw last week. And the dollar skidded lower, contributing to oil's surge.
While investors last week were pleased that federal authorities were constructing a plan to relieve the nation's banks of their toxic assets, many weren't waiting for the details to emerge Monday before seeking safety; selling was heavy across the market, although the financial sector again took some of the biggest hits. Investors are not sure how successful the plan might be in unfreezing credit markets, which many businesses depend on to fund day-to-day operations.
"The reason why they're tumbling down so much is because nothing has happened," Ladenburg Thalman analyst Dick Bove told CBS News correspondent Anthony Mason. "We don't know exactly when the government's gonna step in. We don't know exactly what the government's gonna buy."
Bush administration officials and congressional leaders have been meeting on the rescue plan, the thrust of which congressional leaders have endorsed. Many market observers are hoping for details of the plan to emerge by midweek and delays could weigh further on investor sentiment.