In response, Treasury Secretary Henry Paulson promised the U.S. will begin to buy equity in banks and financial institutions as soon as possible. It will be the first time the U.S. government has bought stocks in banks since the Great Depression.
It was a fitting final hours to one of the wildest weeks in the history of Wall Street, unprecedented and unpredictable.
Within minutes of the Dow's opening, it lost almost 700 points. After that, it went positive for a while, before settling down 128 points, much to the dismay of market experts.
"I think there will come a point when this rubber band, having been stretched so far, will finally snap back," equities strategist Sam Stovall said.
It snapped President Bush into reassurance mode Friday. It was the ninth time he has tried to calm investor panic, but to little avail. The market dropped 100 points as he spoke.
But it is now a world-wide problem. The latest series of market crashes began overnight. Japan's Nikkei staggered to the end of the week after a loss of nearly 25 percent. In Europe, open shares sank to their lowest values since 2003. In Austria and Russia, the markets simply shut down. In London, hundreds protested a plan to partially nationalize banks.
Here at home, investors seem to be waiting for leadership and a plan to get credit flowing again.
"The market is frankly, tired of authorities telling it that the solution is going to take time," Golden Gate University Business School dean Terry Connelly said. "The market is looking for things that are effective right now."
Friday, Paulson also met with finance ministers representing the world's seven major economies.
"We must continue to closely coordinate our actions and work within a common framework so that the action of one country does not come at the expense of others or the stability of the system as a whole," Paulson said.
Saturday, Bush is scheduled to meet with foreign ministers. They will all be looking, again, for a comprehensive and coordinated stabilization strategy.
While Paulson did not give a timeline for when the government might begin to buy equity in banks and financial institutions, he does have support; the proposal is being pushed at the G7 meeting by the Italian Prime Minister.