Markets show little support for Geithner bailout plan

Stock markets sold off sharply on Tuesday as investors reacted negatively to U.S. Treasury Secretary Tim Geithner's new financial bailout program.

The S&P/TSX composite index finished with a loss of229.39 points, or more than 2.5 per cent, at 8,817.89.

On Wall Street, the Dow Jones industrial average dropped 381.99 points — a fall of more than 4.6 per cent — to end at 7,888.88.

The Nasdaq composite index shed 66.83 points, ending at 1,524.73, while the broader S&P 500 slipped 42.73 to finish at 827.16.

The Canadian dollar was also caught in the retreat, falling 1.97 cents to close at 80.24 cents US on foreign exchange markets.

Geithner's plan would see a public-private investment fund established and seeded with U.S. government money to leverage private capital so that so-called toxic assets can be sponged out of the faltering banking system. The goal is to enable banks to resume lending.

The public-private investment fund would start at $500 billion but could expand to up to $1 trillion

However, one analyst said markets were disappointed there were few details about the plan to acquire troubled assets.

"We're not going to put out details until we're confident that we've got the right structure," Geithner said.