Reuters - Stocks sank on Wednesday for the third day after the United States backed away from using its $700 billion bailout to mop up sour mortgages and added to uncertainty about how the government plans to revive bank lending.

Reuters - Congress needs to tackle legal obstacles that prevent mortgage servicing companies from doing more to help distressed borrowers stay in their homes, the head of a U.S. congressional committee said on Wednesday.

AP - An increasingly despondent Wall Street fell for the third straight session Wednesday as investors absorbed another series of dismal corporate reports and news that the government won't buy banks' soured mortgage assets after all. The Dow Jones industrials dropped more than 410 points, and all the major indexes lost more than 4 percent.

Reuters - The Bush administration on Wednesday largely abandoned its plan to buy up toxic mortgage assets and said it will focus its $700 billion financial bailout fund on making direct investments in financial institutions and shoring up consumer credit markets.

AFP - US authorities shifted the focus of a massive financial rescue plan, scrapping plans to buy up toxic mortgage assets and calling for help in restoring credit outside the banking sector.

AFP - The US government has abandoned plans to buy up the toxic mortgage assets at the heart of the global financial crisis, a reversal that helped send ailing world markets spiralling even lower.

AP - While the Bush administration shifts course on its $700 billion rescue plan, Congress is examining whether even bigger changes should be made in the program in light of the deteriorating economy and soaring mortgage foreclosures.

Reuters - Fannie Mae , once a mortgage giant, could post losses totaling $20 billion to $40 billion in the next four quarters, as elevated credit costs continue to hurt the company's capital position, an analyst at FBR Capital Markets said.

AFP - US authorities are scrapping plans to buy up toxic mortgages securities and shifting the focus of a massive financial rescue plan, Treasury Secretary Henry Paulson said Wednesday.

Reuters - Legislation is needed to address mortgage servicing companies' failure to do enough to help distressed borrowers stay in their homes, the head of a key U.S. congressional committee said on Wednesday.

AP - Wall Street remained weary Wednesday, disheartened by more signs of economic stress — including dismal reports from major retailers, a bleak outlook for the nation's auto industry and additional job cuts in the already beaten-down financial sector.

Reuters - The Treasury backed away from using a $700 billion bailout fund to cleanse bank balance sheets of toxic mortgage debt, while Europe reported more gloomy economic news and the World Bank warned that international trade may contract in 2009.

Reuters - Stocks tumbled on Wednesday as gloomy news pointing to the worsening scope of problems buffeting the U.S. economy diminished investors' appetite for risk.