There's more bad economic news. The U.S. government says consumer prices fell by a record amount in October. And U.S. home building dropped to a record low for the month. Meanwhile, U.S. automakers returned to Congress to press again for $25 billion in emergency government loans. In New York, the Dow Jones Industrial average fell below 8,000 for the first time since 2003. Leta Hong Fincher has more.
Wall Street took a new hit on Wednesday, after the government released more bad economic news.
The U.S. Labor Department said consumer prices plunged a record one percent in October. That is the sharpest one-month drop in 61 years.
And a report from the Commerce Department showed that U.S. home building dropped to a record low. Housing starts fell by 4.5 percent in October. That means the number of new homes under construction fell to its lowest level since 1959.
Meanwhile, the heads of the three U.S. automakers continued their plea for $25 billion in emergency government aid.
The chief executive of General Motors, Richard Wagoner, told the House Financial Services Committee on Wednesday that the recent plunge in auto sales threatens the survival of his company.
"What exposes us to failure now is the global financial crisis" he pleaded. "Which has severely restricted credit availability and reduced industry sales to their lowest per capita level since World War II."
The executives say if even one of the automakers goes out of business, the consequences could be catastrophic, with millions of American jobs lost.
The Bush administration and many Republican lawmakers oppose using the $700 billion financial rescue program to aid automakers.
Republican Spencer Bachus said a bailout will not solve the fundamental problems of the automobile companies."A bailout of the auto industry will just push the problem further down the path," he said."To survive, the Big Three are going to have to change and become more efficient and competitive."
Democrat Barney Frank, chairman of the House committee, criticized what he called a bias in using the $700 billion rescue package for banks, in other words white-collar workers, but not blue-collar workers.
"Why was it so acceptable to do that for the financial industry, that is, respond to the need to avoid macroeconomic harm by helping the financial industry - but doing it for the blue collar manufacturing industry was somehow not right," asked Frank.
Frank and other lawmakers argue that immediate aid to the automakers is needed to avoid greater harm to the U.S. economy.
President-elect Barack Obama has said aid to the struggling automakers will be a top priority when he takes office in January.
