President says $30bn nationalisation plan is aimed at protecting retirees and workers.
The sell-off continues as European and Asian leaders gather for the Asia-Europe Meeting in China, to discuss measures to counter the global economic crisis.
And the White House announced on Wednesday that George Bush, the US president, was to host a meeting of world leaders to discuss the crisis on November 15.
The Dow Jones Industrial index closed down 513 points, or 5.7 per cent, at 8,519 on Wednesday after similar slumps in European and Latin American markets.
The Euro and the British pound also plunged to new lows, with the Euro closing at $1.28 and the pound at $1.63 amid growing fears of a recession in Europe.
Gordon Brown, the British prime minister, acknowledged for the first time on Wednesday that the world economic downturn is likely to cause a recession in the UK, the US and other countries.
Global crisis summit
Bush plans to invite members of the G20 group of nations to the summit, which includes the G7 major industrial economies plus key “emerging-market” countries such as China, India and Brazil.
Dana Perino, a White House spokeswoman, said on Wednesday: “The leaders will review progress being made to address the current financial crisis, advance a common understanding of its causes and, in order to avoid a repetition, agree on a common set of principles for reform of the regulatory and institutional regimes for the world’s financial sectors.”
Perino also said that the administration would seek input from the winner of the US presidential election, which will take place on November 4.
“The summit will also provide an important opportunity for leaders to strengthen the underpinnings of capitalism by discussing how they can enhance their commitment to open, competitive economies, as well as trade and investment liberalisation,” the White House said.
European leaders had pushed for a summit before the end of the year and suggested that an overhaul of the financial system should be considered.