Timeline: Crisis on Wall Street

The credit crisis shaking the global economy is forcing a dramatic reconfiguration of Wall Street. Here is a day-by-day look at the impact of the crisis on Wall Street and the steps legislators and government officials are taking to avert a meltdown in the global financial markets.

UAW President Ron Gettelfinger says he hopes Washington will step in to help the auto industry and blames anti-union senators for the collapse of the bailout bill. (Video by AP)

The White House says it will consider tapping TARP funds to aid the automakers. Retail sales fall 1.8 percent in November compared with the previous month. GM says it will slash its first-quarter 2009 production by 250,000 vehicles by temporarily idling 21 factories. United Auto Workers president Ron Gettelfinger warns of an imminent collapse of the Big Three automakers, saying lawmakers are asking the union for too much and everyone else for too little.

Dow Jones Industrial Average: +64.59

A $14 billion bailout for Detroit's struggling Big Three has died in the Senate. The collapse came after bipartisan talks on the auto rescue broke down over GOP demands that the labor union agree to steep wage cuts. (Video by AP)

The auto bailout talks collapse as Senate Republicans and Democrats deadlock on the timing of deep wage cuts for union workers. The number of people filing for unemployment benefits for the first time jumps to a 26-year high. A new Fed report shows that Americans have cut back on their debt levels for the first time on record while falling home values and tightening credit standards drove down the net worth of American households by nearly 5 percent. Hedge fund manager Bernard Madoff is arrested and charged with allegedly running a $50 billion "Ponzi scheme."

Dow Jones Industrial Average: -196.33

Detroit's auto industry has faced setbacks in convincing opponents on Capitol Hill for a taxpayer bailout. As Bob Orr reports, Republicans are concerned with the rescue package's effectiveness. (Video by AP)

The House approves an emergency plan to prevent the collapse of the nation's domestic automobile industry, but the measure faces Republican opposition in the Senate. Auto financing giant GMAC says that its investors are refusing to participate in a plan to save the company by turning it into a bank holding company. Recessions in the United States, Europe and Japan and sharply lower consumer spending slow the global economy. Yahoo and National Public Radio announce layoffs.

Dow Jones Industrial Average: +70.09

Former Freddie Mac CEO Richard Syron, when asked at a House hearing about buying loans that didn't require borrowers to state income or assets, said, "In perfect hindsight, I think we always wish that we hadn't bought them." (By Melina Mara -- The Washington Post)

Former Fannie Mae and Freddie Mac executives appear before the House Oversight and Government Reform Committee to face questions on why the companies moved aggressively into buying and guaranteeing risky mortgages despite warnings. Sony says it will cut 5 percent of its workforce and close half a dozen manufacturing plants. Danaher expands its job cuts. The World Bank says global growth in 2009 will slow to the weakest rate since records became available in 1970. The yield on three-month Treasury bills briefly falls into negative territory for the first time ever. The National Credit Union Administration says that it will offer credit unions $2.5 billion in low-interest loans to support new lending.

Dow Jones Industrial Average: -242.85

House Speaker Nancy Pelosi says: "We call this a barbershop. Everyone is getting haircuts." Rep. Barny Frank says a bill is likely to pass this week. (By Alex Wong -- Getty Images)

Congressional Democrats and the White House propose a $15 billion emergency loan to cash-strapped Detroit automakers. Industrial companies Dow Chemical and 3M announce layoffs and factory closings. The Senate confirms Neil M. Barofsky as special inspector general for the bailout. Internal Freddie Mac documents show that senior executives at the company were warned years ago that they were offering mortgages that could pose dangers to the firm. The Tribune Co. files for Chapter 11 bankruptcy protection.

Dow Jones Industrial Average: +298.76

President George W. Bush on Friday demanded that any U.S. auto industry bailout measure passed by Congress require car companies to pay back taxpayers. (Video by AP)

Automakers appeal to the House Financial Services committee for bailout funds and encounter more skepticism. U.S. employers shed more than half a million jobs in November, the worst monthly showing in 34 years. President-elect Barack Obama's transition team agrees to accompany Treasury Department officials to meet with Capitol Hill leaders to help the Bush administration gain access to the second half of the $700 billion financial rescue package. Data shows that seven percent of homeowners were delinquent on their mortgages and three percent were in the foreclosure process during the third quarter, a record high.

Dow Jones Industrial Average: +259.18

Embattled auto company chief executives scored some points with Congress by driving, instead of flying, to the hearings on a possible U.S. government assistance package. (Video by AP)

The Big Three auto executives return to Capitol Hill to face the questions of skeptical senators in their quest for federal aid. AT&T, Dupont and Credit Suisse announce job cuts. Federal Reserve chairman Ben Bernanke says the government should do more to reduce foreclosures and keep troubled homeownerss in their homes. Major retailers post dismal sales for November. European central banks slash interest rates.

Dow Jones Industrial Average: -215.45

Ford CEO Alan Mulally met with Post editors and reporters to discuss the auto bailout.

The Treasury Department considers a plan to intervene directly in the mortgage industry to dramatically force down rates and stimulate the housing market. Capital One says it plans to buy Chevy Chase Bank. Reports in the Fed's Beige Book show business conditions weakened across the United States as private employers shed jobs and the nation's service sector contracted. In two new concessions, the UAW says it will allow automakers to delay payments owed to a health-care fund for retired workers and suspend a program that pays laid off workers for up to two years.

Dow Jones Industrial Average: +172.60

Detroit's automakers, making a second bid for $25 billion in funding, present Congress with plans to restructure their ailing companies and provide assurances that the funding will help them survive and thrive.

The Big Three automakers unveil their new business plans to Congress in a bid for $25 billion in federal aid. Major automakers report declining sales in November: Ford sales fell 31 percent, Toyota sales dropped 34 percent, General Motors sales were down 41.3 percent, Chrysler sales fell 47 percent and Honda sales fell 32 percent. President-elect Barack Obama meets with U.S. state governors, who urge him to use a stimulus plan to build out infrastructure and support the poor as state budgets are pummeled by the economic downturn.

Dow Jones Industrial Average: +270.00

Treasury Secretary Henry Paulson gives an update on the federal bailout while speaking at the Fortune 500 Forum in Washington (Gerald Herbert - AP)

Economists with the nonprofit National Bureau of Economic Research announce that the U.S. economy entered a recession in December 2007. Stocks plunge in response. Treasury Secretary Henry Paulson says that the administration is looking for more ways to tap a $700 billion financial rescue program, while Federal Reserve Chairman Ben Bernanke says that he is inclined to keep cutting interest rates to try to contain damage from the downturn. The Big Three automakers rush to prepare new business plans to present to Congress in a bid for $25 billion in federal aid. Gas prices fall for the 75th straight day to a national average of $1.82 per gallon, the cheapest price since January 2005.

Dow Jones Industrial Average: -679.95

On Black Friday, the day after Thanksgiving, shoppers kick off the holiday shopping season by bargain hunting. (Gerald Martineau / The Washington Post)

In a $31 billion rescue, the British government takes over Royal Bank of Scotland Group with a majority stake of almost 60 percent after the shareholders of the nation's second-largest bank shunned an emergency share issue. Wall Street extends its holiday rally leaving the Dow Jones industrial average 9.7 percent higher for the week. Retailers manage to rouse many bargain hungry shoppers out of bed through aggressive discounts on electronics, toys and apparel, but consumers keep a close eye on their own bottom lines.

Dow Jones Industrial Average: +102.43

President-elect Barack Obama named former Federal Reserve Chairman Paul Volcker chairman of the Economic Recovery Advisory Board. (AP Photo/Charles Dharapak)

The People's Bank of China cuts its key one-year lending and deposit rates by 108 basis points each, to 5.58 percent and 2.52 percent, respectively. It is the bank's fourth rate cut since September and its biggest rate cut in 11 years. Would-be mortgage borrowers rush to refinance their loans following the government's move to loosen consumer lending. Consumer spending falls by 1 percent in October and consumer confidence falls to a 28-year low in November. President-elect Barack Obama names former Federal Reserve Chairman Paul Volcker to chair a new economic advisory panel.

Dow Jones Industrial Average: +247.14

The government introduced a pair of new programs Tuesday that will provide $800 billion to help unfreeze the market for consumer debt which Treasury Secretary Henry Paulson calls vital to supporting the economy. (AP Video)

The Federal Reserve and Treasury move to boost consumer spending and lower home mortgage rates by committing up to $800 billion to make it easier for households to borrow money for cars, tuition bills and new homes. The Case-Shiller home price index shows that home prices nationally tumble a record 16.6 percent. FDIC Chairwoman Sheila Bair says that the number of "problem" banks and thrifts rose from 117 at the end of the second quarter to 171 at the end of the third quarter, the highest level since 1995. Troubled insurer AIG severely cuts back its executive compensation.

Dow Jones Industrial Average: +36.08

President Bush argues that the government's dramatic rescue of Citigroup was necessary to "safeguard the financial system" and help the economy recover. (AP Video)

On Sunday evening, reports emerge that President-elect Barack Obama and other Democrats are rapidly ratcheting up plans for a massive fiscal stimulus program that could total as much as $700 billion over the next two years. Also on Sunday, the government says it will provide a multibillion dollar backstop for Citigroup, including a $20 billion investment and guarantees against losses on $306 billion in troubled securities. President-elect Barack Obama officially unveils his economic team. The Treasury extends until April 30, 2009, its guarantee on deposits in money-market funds, which was put into place on Sept. 19.

Dow Jones Industrial Average: +396.97

President-elect Barack Obama selects New York Federal Reserve Bank President Timothy F. Geithner as Treasury Secretary. (Daniel Acker - Bloomberg News)

The FDIC seizes three banks, including Downey Savings and Loan Association, a large California mortgage lender. President-elect Barack Obama selects New York Federal Reserve Bank President Timothy Geithner, 47, as Treasury secretary. Citigroup insists it is in good health despite a one-week 60 percent drop in its share price. Car manufacturer General Motors says it will briefly idle five manufacturing plants over the next two months to cut costs. House Speaker Nancy Pelosi (D-Calif.) and Senate Leader Harry Reid (D-Nev.) send a letter to the heads of GM, Ford and Chrysler spelling out the terms that the troubled automakers must meet before Congress will consider a multi-billion-dollar loan to help them stay in business.

Dow Jones Industrial Average: +494.13

Democrats reject the proposed auto bailout deal. (AP Photo/Gerald Herbert)

Stocks plummet for the second day in a row as prospects for a bailout of the U.S. auto industry dim. Lawmakers fail to reach agreement on a proposal to provide $25 billion in emergency aid to the ailing auto industry, but say they may come back after Thanksgiving to try again. General Motors's financial arm, GMAC Financial Services, applies to become a bank holding company, a move that could allow it to grab a piece of the Treasury Department's $700 billion rescue package. China says stabilizing employment is a top priority. Crude oil prices close below $50 a barrel, at $49.62, the lowest price since May of 2005.

Dow Jones Industrial Average: -444.99

Chrysler CEO Robert Nardelli, right, and GM chief Richard Wagoner told Congress that they urgently need federal aid. (AP Photo/Evan Vucci)

Stocks plummet in the final hour of trading closing below 8,000 for the first time in the bear market. The executives of the "Big Three" automakers appear on Capitol Hill to plead for $25 billion in federal aid. October housing starts plunge to their lowest level since at least October 1959 and the consumer price index falls by the largest amount in its history. Federal Reserve leaders release projections indicating they expect the economy to worsen significantly in the coming year and the joblessness rate to rise to 8 percent at the end of 2009. The Senate Banking Committee holds a confirmation hearing for Neil M. Barofsky, the White House nominee to be special inspector general for the plan.

Dow Jones Industrial Average: -427.47

Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp. (FDIC) Chairwoman Sheila Bair testify on Capitol Hill. (AP Photo/Evan Vucci)

The CEO's of the big three Detroit automakers, GM, Ford and Chrysler, plead for assistance on Capitol Hill. In a hearing with the House Financial Services Committee, Treasury Secretary Henry Paulson defends his decisions on how to use the $700 billion financial rescue package. The National Association of Realtors says that median home prices fell across 79 percent of the 152 U.S. cities surveyed in the third quarter and the U.S. median home price is $200,500, down 9 percent from a year ago. The National Association of Home Builders reports historically low home builder confidence.

Dow Jones Industrial Average: +151.17

Senate Majority Leader Harry Reid said he would hold a test vote this week on a broad economic aid plan. (AP Photo/Evan Vucci)

After four straight losing quarters totaling about $20 billion, Citigroup says it will shed 50,000 positions worldwide. A lame duck Congress reconvenes and Democrats push for a bailout of the auto industry. Target says its third-quarter earnings dropped nearly 24 percent as shoppers cut back on spending and its credit card division continued to suffer losses. The National Association of Business Economists' poll of 50 forecasters predicts that the U.S. unemployment rate will top out at 7.5 percent in the third quarter of 2009.

Dow Jones Industrial Average: -223.73

Federal Reserve Chairman Ben Bernanke delivers his speech at the fifth ECB Central Banking Conference in Frankfurt, Germany. (AP Photo/Kai Pfaffenbach)

Freddie Mac reports a loss of $25 billion from July through September due to the falling value of mortgage securities and an increase in reserves to cover future losses. The government is expected to inject $14 billion into the company to return it to solvency. Retail sales plunge by 2.8 percent in October compared with the previous month, the fourth straight drop. Sun Microsystems says it will cut 5,000 to 6,000 jobs, 15 to 18 percent of its work force, as the economic crisis depresses demand for its high-end business computers. President Bush names New York federal prosecutor Neil Barofsky to be a Treasury-based special inspector general to oversee the massive $700 billion financial rescue plan. Metro settles with the Belgian bank seeking to collect $43 million from the transit agency. Details are not disclosed. In Europe, Federal Reserve Chairman Ben Bernanke pledges to work closely with other central banks to fix global financial problems and left open the door to a fresh interest rate cut to help brace the sinking U.S. economy. Philadelphia, Atlanta and Phoenix ask Treasury for some of the $700 billion bailout/rescue to help them pay bills and and finance construction projects.

Dow Jones Industrial Average: -337.94

George Soros listens to testimony on Capitol Hill. (AP Photo/Kevin Wolf)

The Dow surges 552 points in a late afternoon rally after three straight days of losses. Ahead of Saturday's global financial summit, President Bush vigorously defends Western capitalism. Evidence of a worldwide recession mounts as Germany says its economy has shrunk for six consecutive months and the Organization for Economic Cooperation and Development predicts a contraction throughout its membership. The Senate Banking Committee holds hearings on financial firms' use of TARP funds. The House Oversight Committee holds a hearing on hedge fund regulations and their role in the financial crisis. The Wall Street Journal reports that Citigroup may acquire Chevy Chase Bank. October home foreclosures rise 25 percent compared to October 2007 and jobless claims increase by 32,000 to 516,000, the second-highest total since 1992.

Dow Jones Industrial Average: +552.59

Treasury Secretary Henry Paulson says that the $700 billion government rescue program will not be used to purchase troubled assets as originally planned. (AP video)

Treas. Sec. Henry Paulson says the $700 billion government rescue program will not be used to purchase troubled assets as originally planned and that the main priority of the bailout program would be to bolster banks and consumer lenders. The Dow drops over 400 points on evidence of a severe slump in consumer spending. Maryland Senator Barbara Mikulski unveils a proposal to allow car buyers to deduct the interest on car loans and sales tax from their income taxes as a way to help the ailing U.S. auto industry. Former investment bank Morgan Stanley says that it will cut 10 percent of its institutional-securities group and 9 percent of its asset-management professionals. The Wall Street Journal reports that credit card issuer American Express is seeking $3.5 billion from the U.S. government.

Dow Jones Industrial Average: -411.30

Neel Kashkari, Treasury Depart. assistant secretary for financial stability, left, and Federal Housing Finance Agency director James B. Lockhart III, announce a new program to help at-risk homeowners. (AP Photo/Haraz N. Ghanbari)

The government and mortgage industry announce a new program to modify mortgages for hundreds of thousands of borrowers to help them avoid foreclosure. House Speaker Nancy Pelosi says the House will convene next week to vote on a plan to provide emergency cash to the nation's battered automobile industry. Oil falls below $59 a barrel, a 19-month low.

Dow Jones Industrial Average: -176.58

President Bush invited President-elect Obama to the White House for a private meeting. (AP Photo/Evan Vucci)

China announces a $586 billion stimulus package, the largest in the country's history, that would ease credit restrictions, expand social welfare services and include the construction of new railways, roads and airports. The U.S. government expands the bail out package for troubled insurer AIG from $123 billion to $150 billion, restructuring the plan to include much less debt and providing for direct government investment in the company. Electronics retailer Circuit City files for Chapter 11 bankruptcy protection in a reflection of the ongoing economic downturn. Fannie Mae reports a $29 billion third quarter loss and says it may have to tap the government's $100 billion lifeline. Shipping carrier DHL says it will cut 9,500 jobs and reduce its air and ground operations in the U.S. Citigroup says that it will modify the mortgages of 500,000 at-risk borrowers. Starbucks says its fiscal fourth-quarter profit fell 97 percent, dragged down by the cost of closing 600 U.S. stores and 61 stores in Australia and weaker same-store sales.

Dow Jones Industrial Average: -73.27

President-elect Obama answers question during a news conference. (AP Photo/Pablo Martinez Monsivais)

The unemployment rate rises to 6.5%, a 14-year high, after the U.S. economy sheds 240,000 jobs in October. Ford and General Motors report dismal third quarter results, adding urgency to the request by the Big Three automakers for an additional $25 billion in federal assistance. President-elect Barack Obama vows a quick response to the nation's economic crisis. Dennis Lockhart, president of the Atlanta Fed, says the U.S. economy will not turn around until at least the second half of 2009.

Dow Jones Industrial Average: +248.02

A man watches Jean-Claude Trichet, President of the European Central Bank ECB on a TV screen. (AP Photo/Francois Mori)

The Dow falls 443 points after losing 500 points on Nov. 5, resulting in its biggest two-day percentage drop since 1987. The Bank of England cuts its benchmark interest rate to 3 percent, the lowest level since 1955. The European Central Bank, Swiss National Bank and the Czech Republic central bank also cut rates. Toy giant Mattel says it will cut 1,000 jobs, or about 3 percent of its payroll, through a combination of layoffs, attrition and retirements. Fidelity Investments says that it will eliminate about 1,300 jobs, or 3 percent of its workforce, in November with more layoffs to come next year. In remarks to the media, Sen. Chris Dodd, chairman of the Senate Banking committee, makes clear that stronger regulation is coming to the financial industry. The Labor Department reports that the number of Americans drawing long-term unemployment benefits spiked by 122,000 to 3.84 million in late October, the highest level in 25 years. The International Monetary Fund cuts its estimate for global growth by 0.75 of a percentage point today, saying GDP around the world will grow by only 2.2 percent in 2009.

Dow Jones Industrial Average: -443.48

Traders work on the floor of the New York Stock Exchange Wednesday, Nov. 5, 2008. (AP Photo/Richard Drew)

U.S. stocks plunge as investors lock in profits from Tuesday's rally and digest more poor economic news. The Institute for Supply Management says that the service sector shrank by a larger than expected amount in October. House Speaker Nancy Pelosi (D-Calif.) again calls for a lame-duck session of Congress to approve a second economic-stimulus plan aimed at consumers. The Center for Automotive Research says that if Detroit automakers GM, Ford and Chrysler fail, 3 million jobs across the entire auto sector will be lost in the first year of collapse.

Dow Jones Industrial Average: -486.01

President-elect Barack Obama, left, his wife Michelle Obama, right, and two daughters, Malia, 7, and Sasha, 10, wave at the election night rally in Chicago. (AP Photo/Jae C. Hong)

Democratic candidate Barack Obama is elected the 44th President of the United States in a landslide victory over Republican opponent John McCain. The Commerce Department reports that U.S. factory orders were down 2.5 percent in September compared with September 2007, a deeper-than-expected drop.

Dow Jones Industrial Average: +305.45

Ford's sales dropped 30 percent in October. (AP Photo/David Zalubowski)

U.S. automakers announce huge drops in third quarter sales figures. Electronics retailer Circuit City says it will close 155 stores and lay off 17 percent of its work force amid declining sales caused by a pullback in consumer spending and a tightening credit market. The Institute for Supply Management's survey shows U.S. manufacturing is at a 26-year low. The Commerce Department says that construction spending fell by 0.3 percent in September, less than the 0.8 percent expected. The National Association of Business Economists surveys 102 top economists who say the recession will continue through all of next year.

Dow Jones Industrial Average: -5.18

Ben Bernanke speaks to the National Association for Business Economics in Washington. (Manuel Balce Ceneta / AP)

In a speech to a forum on housing finance, Federal Reserve Chairman Ben Bernanke endorses some government backing of home loans. The operator of a central registry for credit default swaps says that it will start posting weekly data on the amount of protection bought and sold on the biggest names in the market. J.P. Morgan Chase says it will begin modifying mortgages under a program that could keep 400,000 families in their homes.

Dow Jones Industrial Average: +144.32

The Federal Reserve cuts the key Federal Funds rate by half a point to one percent, matching its lowest level in decades. The Treasury and FDIC say they are crafting a plan under which the government would guarantee the mortgages of as many as 3 million homeowners now struggling to avoid foreclosure. The Federal Reserve says it will lend money for the first time to central banks in several emerging nations, in order to prevent a global shortage of dollars. GMAC, the financing arm of General Motors, says it is in negotiations to become a bank holding company, a shift that would allow it to take advantage of the government's $700 billion financial rescue package.

Dow Jones Industrial Average: -74.16

The Dow soars almost 900 points in midafternoon trading on investor hopes of a Federal Reserve rate cut. Consumer confidence in the U.S. economy hits an all-time low in October. The S&P Case Shiller Index shows home prices dove a record 17.7 percent in the year ending in August. Global stocks rebound from a string of losses after central bankers slash interest rates.

Dow Jones Industrial Average: +889.35

New home sales rise 2.7% in September, but home values continue to plummet. (David Zalubowski / AP)

The Federal Reserve begins buying short-term debt from banks and companies as a way to make it easier for corporate America to borrow cash to cover day-to-day operations. General Electric is one of the first companies to avail itself of the new short-term funding facility. Fear of a global recession again punishes overseas stock markets. The White House says that financing companies owned by Detroit automakers could qualify for assistance under the $700 billion financial bailout package. Fifteen banks agree to accept government investments, joining the nine largest banks who were forced to accept the funding.

Dow Jones Industrial Average: -203.18

Existing home sales rise 5.5% in September. (Seth Perlman / AP)

The Treasury Dept. says it is working on ways to broaden its $700 billion bank rescue program to help insurance companies that are a critical backstop to a wide range of deals. PNC Financial Services Group says it is buying National City, a struggling Cleveland-based bank, to create the fifth-largest bank in the country by deposits. Chrysler says it will cut 25 percent of its white collar workforce by the end of the year. Tumbling corporate profit reports and poor economic news provoke a wave of selling that guts Asian and European markets pushing major exchanges to near double-digit percentage losses.

Dow Jones Industrial Average: -312.30

Former Federal Reserve Chairman Alan Greenspan testifies in front of the House Oversight and Government Reform Committee, saying the crisis had shaken his very understanding of how markets work and reversing his opposition to the regulation of certain financial derivatives. Treasury Dept. says it will announce that a group of large regional banks have agreed to accept investments from the government, joining nine of the largest American banks who were forced to accept $125 billion in funding last week. A month after the government stepped in to save it from bankruptcy, troubled insurance giant AIG has already consumed three-quarters of its $123 billion rescue loan. General Motors suspends a variety of benefit programs for its white-collar workers and slashes additional jobs to cut costs.

Dow Jones Industrial Average: +172.04

Wachovia reports a historic third quarter loss of $23.7 billion. (Joe Raedle / Getty Images)

Employers begin to aggressively cut jobs and reduce costs in the face of the nation's economic crisis, preparing for what many fear will be a long and painful recession. Treasury hires James H. Lambright to be the chief investment officer of the $700 billion Wall Street bailout/rescue plan. The House Oversight and Government Reform Committee grills executives from the country's leading credit-rating companies, who had privately acknowledged for more than a year that conflicts of interest contributed to the industry's failures.

Dow Jones Industrial Average: -514.45

Treasury Secretary Henry Paulson holds a news conference at the Treasury Department. (AP Photo/Gerald Herbert)

The Fed says it will make up to $540 billion available to buy assets from money-market mutual funds in order to keep the funds from experiencing cash crunches. Major banks, including J.P. Morgan Chase, BB&T, and Zions Bancorporation, say they are considering using some of their federal money to buy other banks instead of issuing new loans. Treasury announces that it has hired PricewaterhouseCoopers and Ernst & Young to be the accountants for the $700 billion Wall Street bailout plan.

Dow Jones Industrial Average: -231.77

Federal Reserve Chairman Ben Bernanke tells Congress a fresh round of government stimulus is a good idea. (AP video)

Federal Reserve Chairman Ben Bernanke testifies before the House Budget Committee and says Congress should consider implementing a second economic stimulus package. China's growth decelerates unexpectedly in the third quarter to 9 percent, raising fears that the global financial crisis could pull one of the world's fastest-growing economies into a recession. Reports appear saying that the International Monetary Fund (IMF) has agreed to lead a $6 billion bailout of Iceland, which experienced a nationwide banking collapse earlier in the month. On Sunday, South Korea says it will guarantee $100 billion in foreign debt and provide $30 billion to banks and exporters in need of cash.

Dow Jones Industrial Average: +413.21

Henry Paulson's Treasury Department said its investments in banks would count as "Tier 1" capital. (Jay Mallin / Bloomberg News)

Banking regulators work to resolve accounting rules that would prevent banks from counting investments from the government as part of their core capital. The Dow continues its volatile swings, closing down 127 points. The city of Chicago considers limiting pay for executives of banks taking bailout money. The Ukraine asks the IMF for a multi-billion dollar loan to help stabilize its financial system. Consumer confidence plunges by the steepest amount on record in October.

Dow Jones Industrial Average: -127.04

Asian markets tumble again on recession fears. (AP video)

The Swiss National Bank says it will use up to $54 billion from the Fed to buy "illiquid securities" from UBS. After falling almost 400 points, the Dow stages a late day rally to close up 401 points at 8,979. Merrill Lynch posts a $7.5 billion third quarter loss on write-downs and credit losses. Citigroup says it lost $2.8 billion in the third quarter, but says it still wants to buy a bank after its bid to acquire Wachovia failed. The government announces an increase of 5.8% in Social Security benefits for 2009, the largest increase since 1982, due to rising food and energy prices. Treasury Dept. hires the law firm of Simpson, Thacher and Bartlett for six months at a rate of $300,000 to be the legal advisers on the $700 billion Wall Street bailout.

Dow Jones Industrial Average: +401.35

September retail sales fell by the largest amount in three years as Americans stayed away from malls and nixed plans for new cars. (By Lois Raimondo / The Washington Post)

The Dow plunges 733 points on investor fears of an impending recession. New York attorney general Andrew Cuomo threatens legal action against insurance giant AIG, if the company does not cease spending money on extravagant bonuses and trips while it is being bailed out by federal taxpayers. Consumer spending plummets, forcing the largest monthly decline in retail sales in three years. The Group of Eight major industrialized nations announce plans to convene a summit to plan changes in the regulation and structure of the world financial industry. Banks hoard cash and restrict lending as consumer credit card default rates rise.

Dow Jones Industrial Average: -733.08

Treasury Secretary Paulson lays out steps to shore up the nation's banking system by having the government buy shares in leading banks. (AP video)

Despite surging more than 4 percent, or 400 points, during early trading, the Dow closes down 76 points on earnings concerns. Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson discuss the federal plan to shore up the nation's banking system. President Bush provides more details of the government's $700 billion bailout plan, which angers community banking executives. The Bank of New York Mellon is selected as the lead contractor in the government's efforts to buy up toxic securities.

Dow Jones Industrial Average: -76.62

Morgan Stanley chief executive John Mack, left, and Citigroup chief executive Vikram Pandit leave a meeting at the Treasury Department yesterday. (Mark Wilson / Getty Images)

After its worst week in history, the Dow soars 936 points, its largest one-day advance ever. Executives of the nation's largest banks agree to accept direct investments of taxpayer dollars, which would give the government an ownership stake of up to $250 billion in a variety of financial institutions. European governments put hundreds of billions of dollars into their banking systems and the U.S. Federal Reserve says it will back up their effort by making U.S. currency available in unlimited amounts. (Video) President Bush and Italian Prime Minister Silvio Berlusconi express confidence that aggressive moves by Europe and the United States will restore confidence in international financial markets. (Video)

Dow Jones Industrial Average: +936.42

Stock prices swung wildly on Wall St. (AP video)

The Dow fluctuates wildly throughout the day, falling nearly 700 points before rebounding late in the day to close down 128 points. Stocks in Europe and Asia continue to plummet. Japan's stock market caps its worst week in history, losing 10 percent. President Bush urges financial markets and the American public to remain calm. (Video)

Dow Jones Industrial Average: -128.00

The Dow closes below 9,000 for the first time since 2003, 39 percent below its peak of 14,164.53 exactly one year prior. The Treasury Dept. says is would allow the government to buy stakes in banks. General Motors shares fall 31 percent to $4.76 after J.D. Power says the auto industry might collapse in 2009. GM issues a statement saying bankruptcy is "not an option." Citigroup ends its takeover bid for Wachovia, allowing Wells Fargo to proceed to purchase the troubled bank for $15 billion, but said it would continue to press a $60 billion lawsuit against the two companies. AIG cancels its second planned luxury retreat. Iceland seizes Kaupthing Bank, the country's largest bank and suspends trading on its stock market. Asian markets rebound after interest rate cuts across the region eased investor fears.

Dow Jones Industrial Average: -675.97

Treasury Secretary Henry Paulson says global markets remain strained. (AP video)

Treasury Secretary Henry Paulson urges patience as global markets continue to slide. The government loans AIG an additional $38 billion one day after it was revealed the company had paid $440,000 for a spa vacation for its executives after getting an $84 billion bailout from the government. The Federal Reserve and European Central banks simultaneously order emergency rate cuts of a half a percentage point early in the morning. The International Monetary Fund predicts a major global economic downturn. Japan's Nikkei index falls 9.4 percent, its largest one-day loss since 1987. (Video) The British government promises to inject tens of billions of dollars in capital into U.K. banks after two consecutive days of dramatic stock market losses. The debt clock in Times Square in New York runs out of room to calculate the national debt.

Dow Jones Industrial Average: -189.96

Fed chairman Ben Bernanke says there is more economic pain ahead. (AP video)

The Dow falls more than 500 points on investor worries about a global recession. The Federal Reserve says it will buy up the short-term debt that funds the daily operations of banks and ordinary businesses. Federal Reserve chairman Ben Bernanke says he is open to cutting interest rates at the Fed's next meeting on Oct. 28. European finance ministers more than double the guarantee on bank deposits to 50,000 Euros.

Dow Jones Industrial Average: -369.88

President Bush says is will take time for the financial rescue plan to bolster the economy. (AP video)

The Dow plunges almost 800 points before staging a late-day rally to close down 370 points, falling below 10,000 for the first time in four years. Citigroup files a $60 billion lawsuit against Wachovia and Wells Fargo. Later in the day, the three companies agree to a standstill of all formal litigation until noon on Wednesday. Bank of America agrees to rework the mortgage terms of up to 400,000 distressed borrowers to settle lawsuits pending against Countrywide Financial, the defunct mortgage lender it purchased in July. The Federal Reserve takes steps to funnel more money into the banking system while the U.S. Treasury says it will increase its bond sales to pay for the $700 billion rescue plan. Global markets plummet on new concerns about the health of the European banking system. The Treasury Dept. says on Sunday that it will tap Neel Kashkari, an assistant secretary of international affairs and a former Goldman Sachs banker, to oversee the government's $700 billion financial rescue program. Over the weekend, Germany says it will guarantee all private bank accounts after a $50 billion plan to rescue Hypo Real Estate collapses.

Dow Jones Industrial Average: -369.88

The House passes the bailout bill. (AP video)

The House of Representatives approves the $700 billion economic rescue package by a vote of 263 to 171. President Bush signs the bill into law. Wachovia snubs Citigroup and agrees to be bought by Wells Fargo for $15.1 billion in stock. Citigroup had offered to buy only Wachovia's banking business for $2.2 billion. U.S. employers shed 159,000 jobs in September, the most in more than five years. The unemployment rate holds steady at 6.1 percent. Gov. Arnold Schwarzenegger sends a letter to Treas. Sec. Henry Paulson warning that the state of California is running low on cash and may need an emergency $7 billion loan within weeks.

Dow Jones Industrial Average: -157.47

The markets digest the Senate's approval of the bailout bill and look forward to Friday's expected vote by the House. (AP video)

U.S. stocks plunge, along with oil and commodities, on worries the economy would not improve after two bleak economic reports are released showing that jobless claims had reached seven-year highs and August factory orders had fallen by the largest amount in two years. The Justice Dept. says it will seek criminal charges against individual brokers and bankers, rather than entire companies, in its investigations into the market crisis. Marriott International says its third quarter profit plunged 28 percent and that it may have to cut thousands of jobs if economic conditions do not improve.

Dow Jones Industrial Average: -348.22

Sen. Barack Obama urges Senators to pass the bailout bill. (AP video)

The Senate approves a revised $700 billion bailout bill by a 74 to 25 vote. The bill is sent to the House for approval. Auto sales plummet 27% in September on a year-over-year basis as credit tightens. General Motors, Ford, Toyota and Chrysler all report double-digit sales drops. Unnerved by the failure of two of the nation's biggest banks, Wachovia and Washington Mutual, wary bank customers continue to shuffle their funds.

Dow Jones Industrial Average: -19.59

Bargain hunters sent the Dow soaring on Tuesday.

The Securities and Exchange Commission and the Financial Accounting Standards Board clarify their guidance on "mark-to-market" accounting rules. The Federal Deposit Insurance Corp. asks Congress to temporarily increase the $100,000 ceiling on bank deposits guaranteed by the government. Libor, the rate that banks worldwide charge each other for short-term loans, spikes by more than four percentage points, to 6.9 percent, its highest level ever. (Graphic: Impact on Businesses and Consumers) The Dow rises almost 500 points as bargain hunters and investors hopeful that lawmakers will eventually pass a bailout package flood back into the market. President Bush again delivers a nationally televised address saying that the economic damage to the nation would be "painful and lasting" is Congress fails to pass a $700 billion bailout bill. Japan's Nikkei stock index falls 4.1 percent as dismal new data show that Japan's economy has almost certainly fallen into a recession. The governments of France and Belgium rescue Dexia, another failing European bank.

Dow Jones Industrial Average: +485.29

President Bush urges lawmakers to pass the $700 billion bailout bill. (AP Video)

The House rejects the $700 billion bailout legislation by a vote of 228-205. The Dow plunges almost 800 points. Citigroup agrees to buy the banking operations of Wachovia for $2.16 billion in a deal backstopped by taxpayers and brokered by the Federal Deposit Insurance Corp. Early in the morning, President Bush urges lawmakers to act quickly to approve the $700 billion proposal hammered out over the weekend.
The Federal Reserve injects hundreds of billions of dollars into the world financial system in response to a plunge in overseas financial markets as a wave of new bank troubles hit Europe. U.K. financial authorities take over one of the country's major mortgage lenders, Bradford & Bingley, and begin selling it off in pieces. It is the second bank nationalization in the U.K. this year after a depositor run undermined Northern Rock. Belgium, the Netherlands and Luxembourg agree late Sunday to pump $11.2 billion into Fortis, a major Belgian financial services conglomerate, in exchange for 49 percent ownership of several Fortis units. The Department of Justice and the SEC launch investigations into Fannie Mae and Freddie Mac over accounting, disclosure and corporate governance matters relating to events from Jan. 1, 2007, to the present.

Dow Jones Industrial Average: -777.68

Senate minority leader Mitch McConnell (R-Ky.) and Gregg Judd (R-N.H.) hold a press conference on Capitol Hill addressing negotiations for a bailout bill to solve the nation's financial crisis. (Dominic Bracco II / The Washington Post)

The Dow opens down triple digits, but recovers most of its losses during morning trading. President Bush delivers a brief address on national television saying that key negotiators would pass a bailout bill. John McCain says he will join Barack Obama for their debate in Mississippi. Democrats say they are 'back on track' after hitting yesterday's roadblock, but no agreement on the $700 billion plan has been reached.

Dow Jones Industrial Average: +121.07

Sen. Richard Shelby, R-Ala., ranking member of the Finance Committee, speaks to the media oafter a meeting with President Bush, congressional leaders and the presidential nominees on the financial crisis. (AP Photo/Alex Brandon)

Negotiators from the Republican and Democratic parties say they have reached agreement on basic principles governing the massive financial bailout, but later in the day top Republicans deny reports of an agreement. Federal regulators seize troubled mortgage lender Washington Mutual in the largest bank failure in U.S. history, then immediately sell much of the company to J.P. Morgan Chase for $1.9 billion in a deal that will create the largest bank in the country. Despite weak economic data, stocks soar as hopeful investors are buoyed by news reports that the financial rescue plan was making its way through Congress. James B. Lockhart III, the chairman of the Federal Housing Finance Agency tells the House Financial Services Committee that the new chiefs of Fannie Mae and Freddie Mac will receive salaries of $900,000.

Dow Jones Industrial Average: +196.89

President Bush urged Congress to support the administration's proposed economic bailout in a televised address Wednesday night. (AP Video)

President Bush delivers a nationally televised address, asking the nation to support the financial bailout plan. (Video). Sen. John McCain suspends his presidential campaign to focus on crafting the bailout package and asks Sen. Barack Obama to delay a debate scheduled for Friday, Sept. 26. Obama says it is more important than ever to have the debate. During his second day of testimony on Capitol Hill, Federal Reserve chairman Ben Bernanke tells lawmakers the U.S. economy is faltering. Peter R. Orszag, the director of the Congressional Budget Office tells the House Budget Committee that the proposed Wall Street bailout could actually worsen the current financial crisis. The Dow takes a breather, moving little amid light trading. Standard & Poors cuts the credit rating of troubled bank Washington Mutual from BB- to CCC.

Dow Jones Industrial Average: -28.28  |  Graphic Analysis

A protestor holds up a sign as Henry Paulson testifies before the Senate Hearing. (Nikki Kahn / The Washington Post)

Lawmakers from both parties question policymakers in the first day of Capitol Hill hearings. Federal Housing Finance Agency official, James B. Lockhart III, says Fannie Mae and Freddie Mac could not continue to cover mortgage losses without government support. The FBI launches an investigation into whether fraud played a role in the collapse of finance giants Fannie Mae, Freddie Mac, Lehman Brothers and AIG, bringing to 26 the number of bureau investigations tied to the crisis. Major Japanese banks continue to snap up Wall Street holdings. Despite pressure from Vice President Dick Cheney and Chief of Staff Joshua Bolten, House Republicans are reluctant to approve massive rescue plan. The Dow falls in late trading. Billionaire investor Warren Buffet's company Berkshire Hathaway invests $5 billion in Goldman Sachs.

Dow Jones Industrial Average: -161.52

Democrats call for the bailout plan to include caps on executive compensation and aid for struggling homeowners. Those engineering the bailout plan struggle with how to value the troubled securities that would be purchased and with how to auction them. Goldman Sachs and Morgan Stanley are converted into bank holding companies, offering them broader government protection in exchange for tighter regulation. Asian banks invest in Morgan Stanley and gobble up the remains of Lehman Brothers. The SEC expands its temporary ban on short selling of financial stocks to 100 additional companies. Fearing massive transfers from bank accounts to money market funds, the Treasury Dept. says it will only guarantee existing investments in money market funds. Inflation fears spark the steepest one-day drop in the dollar in years. Gold prices soar. Oil prices spike more than $16 a barrel, the biggest one-day price jump ever.

Dow Jones Industrial Average: -372.75  |  Graphic Analysis

President Bush, with Federal Reserve chairman Ben Bernanke and Treas. Sec. Henry Paulson, announces a government plan to remedy the crisis. (Pablo Martinez Monsivais / AP)

President Bush announces a plan to buy troubled assets from financial firms. Treasury Dept. offers to protect investments in money market funds. Fannie Mae and Freddie Mac will increase their purchases of mortgage-backed securities, Treasury Dept. says. SEC temporarily bans short-selling in shares of nearly 800 financial institutions and expands its investigations into credit default swaps. Stock markets soar as details of the multi-billion dollar financial rescue plan emerge.

Dow Jones Industrial Average: +360.93  |  Graphic Analysis

 Global Lenders

The Fed and central banks in Europe, Japan and Canada team up to inject as much as $180 billion into global markets to ease the cash crunch, while investors withdraw $80 billion from money market funds. The Bush administration urgently prepares a massive rescue plan to revive the U.S. financial system by buying up bad debts choking the books of financial institutions. Stocks whipsaw, ending on a high note as word spreads of a possible U.S. plan to address the crisis. Putnam Investments closes a $12.3 billion money-market fund to limit losses to its investors.

Dow Jones Industrial Average: +410.68

  London interbank offered rate (LIBOR)

As banks abruptly stop lending to each other, cash becomes scarce, driving up the cost of capital. Washington Mutual puts itself up for sale. Morgan Stanley and Goldman Sachs shares drop 24 and 14 percent respectively. Morgan Stanley and Wachovia enter merger talks. The price of gold soars more than 8 percent. Markets sustain heavy losses as AIG takeover unnerves investors. The SEC adopts new rules prohibiting abusive "naked short-selling."

Dow Jones Industrial Average: -446.92

  AIG stock price, daily close

The Fed lends insurance giant American International Group (AIG) $85 billion in exchange for nearly 80 percent of its stock. Lawmakers clamor for government action and contemplate other dramatic interventions. Lehman Brothers heads to bankruptcy court and seeks to sell parts of its business to ease the bankruptcy process. Oil prices drop almost $4.56 a barrel, continuing a two-month decline from all-time highs. The Dow Jones industrial average rebounds on the news that the Fed has agreed to help AIG.

Dow Jones Industrial Average: +153.40

Lehman Brothers files for bankruptcy protection. Bank of America agrees to buy Merrill Lynch. The Federal Reserve elects not to raise interest rates, despite pleas from Wall Street. Global stocks plunge on Wall Street worries. Oil drops below $100 a barrel. New York state allows insurance giant AIG to use $20 billion from its own insurance subsidiaries to ease a financial crunch.

Dow Jones Industrial Average: -498.86  |  Graphic Analysis

Treas. Sec. Henry Paulson speaks during a news conference in Washington.

The government seizes control of mortgage giants Fannie Mae and Freddie Mac, promising to inject up to $100 billion in total for each company if they are insolvent. The two companies had funded more than two-thirds of U.S. home loans in recent months. Treas. Sec. Henry Paulson says the government will start buying securities backed by mortgages -- initially, up to $5 billion worth.

Dow Jones Industrial Average: -498.86  |  Graphic Analysis

For more information on what caused the credit crisis, an extended timeline and interactive graphic, see our special report on the roots of the housing bubble and our full coverage of the unfolding financial crisis.