“We’re in the midst of a challenging period,” Bush said at the White House, with members of his economic team flanking him. But he said the US economy remains remarkably resilient and has overcome big challenges before.

In a conference call with Democratic leaders on Thursday afternoon, Bush signaled his eagerness to reach agreement. “I think there was a collective sense that there was no reason why we can’t get something done quickly,” said Tony Fratto, the White House deputy press secretary.

Stocks on Wall Street rebounded early on Friday from their precipitous fall on Thursday, a 3 per cent drop despite reassuring words by Federal Reserve chairman, Ben S Bernanke, and an emerging consensus about the stimulus plan, which many worry could be too late.

In early trading on Friday, the Dow Jones industrial average rose more than 170 points on a strong outlook from IBM, before falling below 100 points. Until Friday, stocks had been dropping dramatically as data showed that the housing debacle was getting worse and beginning to bring down the rest of the economy.

Despite Bernanke’s comments on Thursday that a recession could be averted, by the end of the day, the Dow had plunged 307 points; the fall since January 1 is now 9.2 per cent. Adding to the pessimism were reports that manufacturing activity could be slowing even more than analysts had expected, and that housing starts dropped 14 per cent last month and reached their lowest level in 16 years.

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