U.S. House Rejects $700 Billion Financial-Rescue Plan (Alison Vekshin and Laura Litvan)

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(Bloomberg) -- The U.S. House rejected a $700 billion financial-rescue plan intended to restore confidence in the nation's banking system, dealing a blow to government efforts to contain a lending crisis.

The House rejected by a vote of 228 to 205 the measure to authorize the biggest government intervention in the markets since the Great Depression.

The Dow Jones Industrial Average fell 554 points, or almost 5 percent to 10,589, at 2:32 p.m. New York time.

``The American people rejected this bailout and now Congress did likewise,'' said Republican Representative Mike Pence of Indiana.

The legislation would have given Treasury Secretary Henry Paulson broad authority to buy troubled assets from financial companies.

``I'm very disappointed,'' said House Financial Services Committee Chairman Barney Frank. ``The Republicans killed this.'' He said there would not be another vote on the issue today.

President George W. Bush, who personally lobbied lawmakers to support the measure today, will consult with congressional leaders ``to determine the next step,'' said spokesman Tony Fratto.