The News

washingtonpost.com — U.S. stocks plummeted in early trading today as economic turmoil rippled through Europe and investors questioned whether a bailout of the financial sector would be enough to prevent a global recession. The Dow fell more 500 points mid morning but then retreated to more than 400 points lower by 11:18 a.m. It was the first time since October 2004 that the Dow fell below 10,000. The Nasdaq and Standard & Poor's 500-stock index were both down by 6 percent and by 11:18 a.m. had come back slightly, down 5 percent and 4.7 percent, respectively.

usatoday.com — The Federal Reserve said that it will begin paying interest on commercial banks' reserves and will expand its loan program to banks by billions of dollars, fresh steps to help ease a painful credit crisis. The $700 billion bailout law gives the Fed the power to pay interest on those reserves for the first time. The law accelerated the effective date to October of this year vs. in 2011.

cnn.com — The number of homeless families in Massachusetts has surged —p a spike that has overwhelmed the state's shelter capacity and forced it to again place homeless families in motels. Driving the increase is the sour economy, rising energy costs, escalating unemployment and shortage of affordable housing. For the first time, the state is tracking how many families are winding up homeless due to foreclosures. Massachusetts isn't alone. Advocates for the homeless say that while statistics are still sketchy, many areas are reporting increases in the number of homeless families.

nytimes.com — More than one-third of all Americans will soon receive better insurance coverage for mental health treatments because of a new law that, for the first time, requires equal coverage of mental and physical illnesses. The requirement, included in the economic bailout bill that President Bush signed, is the result of 12 years of passionate advocacy by friends and relatives of people with mental illness and addiction disorders. Most employers and group health plans provide less coverage for mental health care than for the treatment of physical conditions like cancer, heart disease or broken bones. They will need to adjust their benefits to comply with the new law, which requires equivalence, or parity, in the coverage.

marketwatch.com — Bank of America and a number of U.S. states reached an $8.4 billion accord under which the banking giant will modify troubled mortgages and enable nearly 400,000 Countrywide Financial Corp. clients to keep their homes. Bank of America acquired Countrywide on July 1. The program is designed to resolve claims that several state attorneys general had filed against the Calabasas, CA., mortgage firm. The program's goal, Bank of America said in a statement, is to enable borrowers who financed their homes with subprime loans or pay-option adjustable-rate mortgages to hang on to those homes.

iht.com — Americans have concluded that it is tough to get a job. That fact, along with a host of other issues, ranging from high gasoline prices to falling home prices and the credit crisis, provides reason to expect consumer spending to be weak. The belief that work is hard to find has typically become as widespread as it is now only many months after a recession has begun. In 2001, in fact, the view did not get that negative until after the recession was already over. Worries about jobs often continue well after recessions end, a sign that the current sour outlook could continue for some time, even if the economy is close to hitting bottom.