So Blagojevich is big news, but former Nasdaq chair arrested on $50 billion fraud charges is buried?

Stocks extend losses amid worries about automakers

By SARA LEPRO and TIM PARADIS

NEW YORK (AP) — Wall Street saw early selling pressure ease Friday following word from the Treasury Department that it would step in to prevent a collapse of the nation's Big Three automakers. Stocks came off their early lows but selling continued for a second session.

After falling more than 200 points at the open, the Dow Jones industrial average and other indicators began to pare their losses after White House and the Treasury said they were considering diverting money from the Wall Street rescue fund to stave off bankruptcy filings among the carmakers.

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Investors also grappled with further prospects of diminished confidence in Wall Street. Late Thursday, Bernard L. Madoff, a former Nasdaq stock market chairman was arrested on a securities fraud charge, accused of running a phony investment business that lost at least $50 billion and that he called a "giant Ponzi scheme," prosecutors said.

"It's not a happy day when you see a $50 billion fraud," said Ken Mayland, president of research firm ClearView Economics. "Things like that will just erode the public's confidence in the market, that it's either a rigged game ... or it's a crooked game."

Markets overseas plunged in response to the failed auto bailout bill. Meanwhile, British Prime Minister Gordon Brown said European Union leaders have agreed on a $267 billion economic stimulus package to rescue their recession-hit economies. Japanese Prime Minister Taro Aso also announced a new stimulus package to shore up his country's economy. The new package includes $111 billion in tax breaks and public financing and $144 billion to prop up financial markets.

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