The U.S. House of Representatives blocked a $700-billion bailout on Monday afternoon, sending world stock markets spiraling further downward in late-afternoon trading.
Congressional leaders on both sides of the U.S. political spectrum - both Republican and Democrat - voted against the bill, which was defeated 228 to 205.
Some Republicans who voted against the bill had called it "socialism," while Democrats not onside with the biggest bailout in U.S. financial history said they were concerned the bill didn't contain enough provisions to help homeowners.
The news sent stock markets on both sides of the border into a tailspin. The TSX was down 897.93 points, or almost eight per cent, at 3:19 eastern time while the Dow Jones had suffered a loss of 640.93 points.
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