Stock down 700 points, Bush offers bank plan

Posted by Mike Mardis - email

NATIONAL (NBC) - There's new evidence out Wednesday that, despite government efforts to turn things around, the economy's headed for a rough ride for the rest of this year and into next.

Consumers are spending less, profits are down at banks like JP Morgan and Wells Fargo and that news sent stock prices plunging down more than 700 points.

There is some good news though, wholesale prices dropped for the second month in a row, mainly due to cheaper oil. That could keep inflation in check and lead to lower prices at the grocery store.

The Bush administration is focusing on banks. Buying their stock so banks can make loans and ease the credit crunch.

President Bush pitched the plan to bankers and businesses in Michigan Wednesday.

"Frankly, I don't want government being involved in businesses," Bush said. "Don't think it's good for the country. It's necessary that stock be purchased to help us in this financial crisis."

A federal reserve survey out Wednesday shows economic activity down in all 12 of its regions.