Market response

Despite the introduction of the new package, US stocks plunged afterwards. The Dow Jones index dove nearly 382 points, or4.62 percent, to 7,888.88, the biggest decline since December 1.

Broader stock indicators also tumbled. The Standard & Poor's 500 Stock index dropped 4.91 percent to 827.17, the biggest drop since Obama took office on January 20. The Nasdaq composite index also fell 4.20 percent to 1,524.73.

Meanwhile, light sweet crude for March delivery slid by US$2.01 to US$37.55 a barrel on the New York Mercantile Exchange. The dollar strengthened against other major currencies, and gold prices also rose.

Financial shares lost ground, as Bank of America Corp. tumbled 19.3 percent to US$5.56 a share, Wells Fargo & Co. shares fell 14 percent to US$16.35, and Citigroup plunged 15.19 percent to US$3.35.

A survey by CNBC of more than 32,000 investors showed that 67 percent of them believed that the new proposal would not solve the current financial crisis.

Missing details

Many believe that the new package is not specific enough to deliver a boost to investors' confidence.

The most important part of the plan is the Public-Private Investment Fund, which will provide government funding to private sectors to purchase bad assets.

However, Geithner gave no details on the structures of the initiative or how the private investors would price the toxic assets.

Many analysts were disappointed to find that the much discussed relaxation of mark-to-market accounting rules was missing in the new proposals.

The idea of "stress test" for banks also raised questions. It is not sure how the assessment will be conducted. And the proposal did not specify on how it would help the housing market.