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U.S. markets fall Wednesday

NEW YORK, Oct. 1 (UPI) -- U.S. stock indexes fell Wednesday, although investors were reportedly betting on a bailout from Washington to ease credit and shore up financial firms.

"Given the political capital invested by all sides, we think that ultimately a deal will be reached," Nick Nelson, a UBS AG strategist in London told The Wall Street Journal.

In late-morning trading, the Dow Jones industrial average lost 154.67 points, or 1.43 percent, to 10,695.99. The Standard and Poor's 500 fell 1.71 percent to 1,146.42, down 19.94 points. The Nasdaq composite index slid 1.76 percent to 2,055.08, off 36.80 points.

The benchmark 10-year U.S. Treasury bond rose 27/32 to yield 3.719 percent.

The dollar was mixed Wednesday. The euro fell to $1.399, compared to $1.4076 Tuesday. Against the Japanese yen, the dollar fell to 105.96 yen, up from 106.35 yen.

In Tokyo, the Nikkei average gained 108.40 points to 11,358.26, up 0.96 percent.

Small businesses mixed about bailout

WASHINGTON, Oct. 1 (UPI) -- Acceptance of a federal bailout for Wall Street is mixed among owners of small U.S. businesses with many wondering what's in it for them, analysts said.

Many feel "Wall Street is being given a free ride," George Cloutier, chairman of American Management Services, told The Washington Post Wednesday.

"The way the bailout has been sold ... is that you are going to perish if you don't get this through and your credit is going to dry up overnight," he said.

Businesses owners relying on easy to obtain credit are worried.

"Our concern is with what would happen without the rescue plan, if capital does tighten up and continues to be hard to come by," John McEleney, the incoming chairman of the National Automobile Dealers Association, told the Post.

Banks asked Amber Sutton of Woodbridge, Va., to put her own home and stock portfolio up as collateral for a $400,000 loan to start a pet day-care business, the Post reported. She was also required to get a life insurance policy before the loan was approved.

"It was very difficult," Sutton said of the loan process. "Nobody turned me down ... but banks were a little more cautious."

Mortgage volume down

WASHINGTON, Oct. 1 (UPI) -- The volume of applications for U.S. mortgages declined last week, falling by a seasonally adjusted 23 percent, an industry group said.

The Market Composite Index, which measures mortgage loan application volume, fell from 591.4 to 455.4 in the week ending Sept. 26, the Mortgage Bankers Association said in a release Wednesday.

The Refinance Index also decreased, down 34.7 percent to 1,333.9, the MBA said.

The average interest rate for 30-year, fixed-rate mortgages decreased from 6.08 percent to 6.07 percent with points falling from 1.13 to 1.12, the organization said.

Rates for the average 15-year, fixed-rate mortgage fell from 5.84 percent to 5.82 percent. Points in 15-year, fixed-rate mortgages fell from 1.17 to 1.11.

The average interest rate for one-year adjustable rate mortgages increased from 7.01 percent with an average 0.33 points to 7.19 percent with 0.24 points, the report said.

Wall Street slipping in global status

NEW YORK, Oct. 1 (UPI) -- Wall Street's status as the world's top financial district appears to be slipping, while Shanghai and others are growing in stature, analysts say.

"Dubai, Singapore, Shanghai and Mumbai -- they are the probable leaders," said Michael Mainelli, executive chairman of Z/Yen group, which released a survey ranking financial centers, The Washington Post reported Wednesday.

The survey claimed New York and London were still the most competitive financial centers but they were losing ground, as were financial districts in Frankfurt, Germany and Paris.

China's large banks have been relative safe from the recent global financial crisis and the country's economy is expanding, the Post reported. As such, China feels confident in its rising status.

"It is inevitable that we will take the U.S.'s place as the world leader," Fan Dizhao, an investment manager at Guotai Asset Management in Shanghai, told the Post.