Bank rescues spread as Bush pushes bailout

By Eddie Evans

NEW YORK (Reuters) - Bank rescues spread in Europe on Tuesday and President George W. Bush gave assurances that a $700 billion bailout plan for the financial sector was not dead, giving markets around the world a boost.

The House of Representatives rejected the bailout plan on Monday, sending stocks to their biggest percentage decline in 20 years.

Bush, Treasury Secretary Henry Paulson and congressional leaders pledged to continue negotiations, but the earliest that Congress could start work would be Wednesday.

"There's an overarching belief that at some point this week, whether it's Wednesday or Thursday, we'll get something passed by the House," said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

Without the bailout plan, which would allow the Treasury to buy toxic mortgage-related assets from banks, credit markets around the world could remain frozen, which could lead to a recession.

"I assure our citizens and citizens around the world that this is not the end of the legislative process," Bush said before the stock market opened.

The White House said Bush had "constructive" talks with presidential candidates Sen. John McCain, a Republican, and Sen. Barack Obama, a Democrat, on Tuesday. Both candidates have urged their fellow members of Congress to pass the bailout package, which has overshadowed their campaign for the November 4 election.

Ireland unveiled a blanket guarantee for savings held by its banks, covering up to 400 billion euros ($575 billion) in liabilities, sending Irish bank stocks roaring up against a weaker sector trend.