Bush to meet Sarkozy, EU on finance crisis

WASHINGTON (CNN) -- U.S. President George W. Bush plans to host French President Nicolas Sarkozy and EU President Jose Manuel Barroso at Camp David Saturday to discuss the global financial situation.

"Certainly expect that the global financial situation will be at the top of the agenda," National Security Council spokesman Gordon Johndroe said earlier this week.

The three men would meet before dinner at the Maryland retreat to discuss a variety of issues.

Sarkozy and Barroso were in Quebec, Canada, on Friday for the Canada-EU Summit, as well as the opening of the annual Francophonie Summit of French-speaking nations.

Meeting with Canadian Prime Minister Stephen Harper, Sarkozy and Barroso later called for an international summit by the end of this year to address the global financial crisis.

On Friday, a day of volatility in the world markets, Bush called government interventions in the financial system necessary to ward off a wider economic crisis.

"The U.S. government is acting," Bush said, "and we will continue to act, to resolve this crisis and return stability to our markets."

His comments came as more bad economic news emerged -- this time from the U.S. construction industry with the number of new build homes sliding to a 17-year low.

Applications for building permits are considered a reliable sign of future construction activity, and the sharp fall indicates that home building will continue to be a drag on the economy.

Bush, speaking to the U.S. Chamber of Commerce, added: "This is an anxious time, but the American people can be confident in our economic future." Watch more of Bush's speech »

Meanwhile governments around the world have moved to take stakes in banks and pump more cash into loan markets to boost confidence.

On Friday, Germany's upper house of parliament unanimously voted to adopt a $670.7 billion stabilization package for the country's economy.

In Europe, London's FTSE 100 closed up 5.2 percent, Paris's CAC-40 was 4.6 percent higher and Frankfurt's DAX 30 was 3.4 percent up.

In the U.S., the Dow Jones industrial average fell 127 points, or 1.4 percent. The Standard & Poor's 500 index lost 0.6 percent and the Nasdaq composite lost 0.4 percent.

In Asia, Japan's Nikkei closed up 2.8 percent, recovering from its 11 percent slump Thursday -- the worst loss in two decades.

In other Asian-Pacific markets, Australia's All Ordinaries index closed down 1.1 percent. In Seoul, South Korea's KOSPI index slipped 2.7 percent.

The Hang Seng index in Hong Kong was down 4.4 percent in afternoon trading, while the Taiwan Weighted finished down 2.3 percent. The Singapore Straits Times index pushed lower, slipping 2.8 percent. Mumbai's BSE SENSEX was trading down about 3 percent. Watch more on Iraq and the credit crunch »

Investors have been concerned that recent turmoil in the global financial system would trigger a worse than expected slowdown in economic activity.

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