In the hours after Congress rejected the bailout package, people across the financial spectrum watched as stocks declined, jagged up and declined some more.

Ultimately the day ended with the Dow Jones industrials down 777 points, which was nearly 7 percent. The Nasdaq was down just over 9 percent and the Standard & Poor's 500 Index was down just under 9 percent.

As bad as the carnage was yesterday, "it probably gets a little bleaker before it gets better," said Geoffrey Gerber of Twin Capital Management, a McMurray investment management firm.

Mr. Gerber said the market is so volatile that investment decisions that make you look like a genius one minute "three hours from now will make you look like a fool."

"One can certainly view this as a buying opportunity. The question is: 'How's your stomach?'" Mr. Gerber said.

He believes Congress eventually will approve a bailout package. "It's just a question of how much damage there is until that point."

As the stock market reacted wildly to the debate on Capitol Hill, financial planners in the Pittsburgh metropolitan area spent much of their day advising clients to keep a level head.

"We're telling people to be patient, maintain a diversified portfolio and don't make any irrational decisions," said P.J. DiNuzzo, president of DiNuzzo Investment Advisors Inc. in Beaver.

Pittsburgh-based law firm K&L Gates LLP launched a special team of lawyers, the Global Financial Markets Group, to advise its clients on how to cope with the ongoing economic crisis.

"We're obviously in a very serious situation that needs to be addressed responsibly and quickly," K&L attorney Michael Missal, a partner in the firm's Washington, D.C. office said. "Obviously, the markets are not perceiving the actions by Congress as a positive step."

Investors who bet heavily on individual stocks, particularly in the financial sector were hit hardest. National City bank saw its stock fall more than 60 percent yesterday to a share price of $1.43.

"We believe recent performance of our stock reflects the extreme volatility in the financial services market as the result of an irrational perception, fed by unfounded and inaccurate speculation, comparing us to Washington Mutual and Wachovia," Bill Eiler, a spokesman for National City, said. "We are optimistic that our future stock performance will begin to reflect the facts, as the market sorts through the erroneous rumors and speculation."

The failure of banks caught with bad mortgages belies the fact that some banks are in good shape.

"Most small banks are fine," said William J. Burt, president and chief executive officer of Gateway Bank. The 4-year-old Peters bank has branches in Peters and Cranberry.

"We continue to accept deposits and we continue to make loans because we do not have any subprime issues," Mr. Burt said. "We are strong and ready to serve customers."

As for Congress' failed effort yesterday to rescue financial institutions saddled with toxic debt, Mr. Burt said: "We somehow need to get our government to resolve this."

"The private sector will take care of this problem if the public sector doesn't. It just won't be pretty," said Charlie Smith, chief investment officer of Fort Pitt Capital Group, Green Tree. "The process will involve liquidations. Businesses that borrowed too much money will be liquidated to meet creditors' demands.

"Companies that are well financed and don't have to borrow billions to run their businesses are just fine. They will see their earnings decline as the economy slows, but the only ones that will have their existence threatened are those that have funding problems and we are finding out who those are."

While many people have mixed emotions about the federal government's rationale for bailing out private banks, Alex Kindler, a CPA with the Horovitz Rudoy & Roteman accounting firm, Downtown, said he is convinced it will all add up to a tax increase regardless of which party wins the White House in November.

"Taxes will increase or there's no way we can pay for this bailout," Mr. Kindler said. "The idea has been floated that taxpayers could reap a financial windfall upon the turnaround of these financial institutions, but the general sentiment is it's a pipe dream."

Elliot Dinkin, a vice president of Cowden Associates Inc., a firm that provides consulting and actuarial services to midsized companies, said he has noticed that clients are taking longer to pay their bills to his firm as the economy weakens.

He kept an eye on the markets yesterday and said there is nothing any of us can do.

"It's a horrible situation and I hate the fact we're sitting here asking what happened and what should happen," he said.

Mr. Dinkin said he was confident that the U.S. House of Representatives eventually would pass a bailout bill, but defeated it first so the members could say they voted against it.

United Steelworkers International President Leo Gerard said the next proposal should include spending on infrastructure improvements, health care and investments in technology to stimulate the economy by providing well-paying jobs.

"We need to get back to the drawing board and devise a plan that recognizes the predicament millions of working families and retirees now face as a result of Wall Street's longtime greed and ongoing lack of regulation," Mr. Gerard said.

Attorney David W. Lampl was streaming CNN on his computer yesterday so he could keep an eye on what was happening in Congress in between the demands of doing his job as chairman of the bankruptcy and creditors' rights practice group at Downtown firm Leech Tishman Fuscaldo & Lampl.

"Right now, I think what you're seeing is certain members playing politics with this," he said, after the package was voted down yesterday afternoon.

The way he sees it, Congress doesn't have a choice but to try to stabilize the financial system and the people he runs into generally understand that. "Yes, they think the bailout is necessary, but people are not happy about it."

Accountability for the problems should be determined, he said, but that may take awhile.

No matter what steps the lawmakers take, the current tightening of the credit markets is likely to have other consequences down the line, he said. "We'll certainly see an uptick in business failures."

"This is hands down the most challenging time I've seen in my lifetime," said Steven Baumgarten, an analyst with PNC Capital Advisors in Philadelphia who started investing when he was a teenager in the 1980s.

He wasn't tracking developments in Washington, D.C., minute by minute yesterday but nobody who follows the stock markets could miss the gyrations triggered by the afternoon rejection of a bailout package. "I'm sure you can see how Wall Street feels about that," he said dryly as the Dow was tumbling hundreds of points.

Retailers struggling to get credit to keep merchandise flowing through the holidays are likely hoping that something happens to stabilize the financial system, said the analyst who follows several retail stocks.

Still, the overall economic situation has probably already taken the luster out of most companies' expectations for the holiday shopping season, Mr. Baumgarten said. "I just think no matter what, it's not going to be a great Christmas."

Hospitals also could be hard hit as the economic turmoil continues, which, in turn, could have a big impact on the state's economy, said Carolyn F. Scanlan, president and chief executive officer of the Hospital and Healthsystem Association of Pennsylvania.

"Hospitals are highly dependent on the financial markets for a whole bunch of reasons. They are really dependent on investment income and the use of that income in their operations," she said. "So, as investment income has turned negative, that shows up in their operating statements as well as on their balance sheet."

A tightening credit market makes it harder, and more expensive, for hospitals to borrow money they need to stay current with technology equipment and updating their physical plants, she said.

At the same time, a slumping economy means more patients will have trouble paying for their care, increasing the amount of uncompensated care hospitals must absorb. And, as officials struggle to bring government spending under control, they may look at reducing services in Medicare and Medicaid.

"I think it's going to be difficult."

Biotechnology startups could also be struck by the falling economy, said John Manzetti, chief executive officer of Pittsburgh Life Sciences Greenhouse, which assists bioscience startups with early-stage funding.

"Our companies will have a tough time attracting the capital that they need in a timely fashion ... as things get more and more obscure, the money's going to be tougher to get and it will take longer to get it."

Such delays can be deadly for young companies that need to get their products to market as quickly as possible.

Glen Meakem, co-founder of FreeMarkets Inc., GOP moneyman and now a radio show host and managing director of Meakem Becker Venture Capital, isn't a daily trader, but with lots of assets in lots of different pots, the constant Wall Street drama "clearly is worrying," he said.

He watched the news, muted, from his office yesterday. "At this point, this is not a bailout," Mr. Meakem said. A bailout suggests the boat is still afloat, taking on water. "This is a rescue. Shareholders have already been crushed. Nobody is being bailed out."

But he also urged calm and a sense of context. History remembers little but the biggest and longest-lasting of swings and panics. If the market rebounds in the days or weeks to come, few will remember the volatility of Sept. 29, 2008, or how much the Dow dropped that day.

"That's the nature of the markets," he said. "These things react very fast. You look back, and you don't remember these up and downs."