(CNN) -- The Bush administration and key lawmakers vowed Tuesday to push ahead with a proposed $700 billion financial bailout plan that was rejected Monday.
Stock markets rallied amid efforts to resurrect the bailout bill aimed at stabilizing the U.S. economy following weeks of turmoil that have transformed the global financial landscape.
President Bush said in a brief televised address at the White House. "I'm disappointed by the outcome, but I assure our citizens, and citizens around the world, that this is not the end of the legislative process."
He added: "Our economy is depending on decisive action from the government. The sooner we address the problem, the sooner we can get back on the path of growth and job creation. This is what elected leaders owe the American people, and I am confident that we'll deliver."
The bailout proposal, which would give U.S. Treasury Secretary Henry Paulson the authority to buy up toxic mortgage-related assets in troubled banks, was rejected Monday by the House of Representatives, prompting massive losses on Wall Street with the Dow Jones plunging 777 points -- its worst performance since the 1987 stocks crash.
The administration believes a bill can be passed this week, said White House deputy press secretary Tony Fratto.
Bush spoke Tuesday to the two men running to replace him -- Republican John McCain and Democratic Barack Obama -- who agreed "this is a critical issue that needs to be addressed," Fratto said.
The Dow Jones closed almost 500 points up, or about 4.7 percent. The Nasdaq and the S&P also ended the day between 5 and 5.5 percent higher.
Major European markets closed up, with Britain's FTSE 100 up about 2.1 percent, France's CAC 40 up 1.7 percent and the German DAX 30 up marginally.
The sharp slide continued in Asian markets Tuesday, although most of the indexes there closed off their low of the day.
Japan's Nikkei lost 483 points, or four percent, while Australia's markets fell 4.3 percent and Taiwan's stocks lost 3.6 percent. But Hong Kong's Hang Seng closed narrowly higher.
U.S. crude for November delivery rose $4.27 to end the day at $100.64 a barrel in New York trading.
The credit crisis that prompted the bailout proposal, and attempts to revive the plan, were the focus of attention for investors Tuesday.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said the London market clung to hopes of a fresh vote in the U.S. later in the week.
"This deal is not dead in the water and there are hopes that when Congress reconvenes it could still go through," he told the UK's Press Association.
In Russia stock exchanges suspended trading soon after markets opened Tuesday after shares on the main index plunged more than eight percent. Full story
Both exchanges -- the main RTS index and the MICEX currency exchange -- reopened later in the day, the indices said.
The Bank of Japan on Tuesday morning pumped another two trillion yen ($19.23 billion) into money markets, amid an effort among the world's central banks to calm worries about a global financial crisis, The Associated Press reported.
The Bank of Japan in recent weeks has been injecting trillions of yen by the day to add liquidity into the system. The latest brings the bank's infusion to a total of 20 trillion yen ($192.3 billion), AP reported.
And the Irish government said it would guarantee all deposits in Irish banks following a massive drop in the value of Irish bank stocks on Monday.
The Belgian government announced Tuesday morning a €6.4 billion ($9.2 billion) plan to rescue faltering bank Dexia, which ran up huge losses in its U.S. operations. Full story
Monday's plummet wiped out $1.2 trillion in market value, the first post-$1 trillion day ever, according to a drop in the Dow Jones Wilshire 5000, the broadest measure of the stock market. However the 7 percent decline does not rank among the top 10 percentage declines.
Even if it eventually passes, the bailout is seen as the beginning of a long process at cleaning up the bad debt mess. Treasury Secretary Paulson said he would continue to work with congressional leaders to draft a new plan that will be passed. Bailout explainer: What got killed
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