Big hopes for plan fade with lack of specifics

— -- Wall Street gave the government's long-awaited plan to rescue the financial system a resounding thumbs down Tuesday, providing another sign of the mounting frustration over the financial crisis.

Calling the plan from Treasury Secretary Timothy Geithner short on details, traders and investors slammed the Dow Jones industrials down 382 points, or 4.6%, to 7889, its biggest loss since December. The drubbing took the Dow just 337 points from its bear market low set in November. Meanwhile, a flight to safety pushed U.S. government debt prices up and yields down. The benchmark 10-year note yield fell to 2.82% from 2.99% Monday.

Despite hopes the plan would lay out fresh ideas to get loans and business activity flowing, traders and investors say it was unclear and tentative. "It's too vague," says Oliver Wiener, trader at BTIG. "A lack of action creates uncertainty in the market." Disappointment centered on aspects including:

•Lack of specific actions. The plan outlines a stress test for banks to find which are salvageable. There's also a plan to create an investment fund with up to $1 trillion in public and private money and another $1 trillion for a consumer and business lending program. Appearing before Congress, Geithner vowed to "flesh out the details" later. But investors wanted flesh now, says Bill Ryder of Riverfront Investment. "They haven't said what their plan is. It's my sense, they're unsure themselves."

•Failure to deal with the bad loans. Investors want the government to take leadership in quarantining toxic assets, rather than pouring money into weak banks and allowing the infection to spread, says Robert Maltbie of Singular Research.

•Void of a new approach. Investors hoped Treasury would be more creative, perhaps helping weak banks restructure in an orderly way, says Ken Winans of money manager Winans International.

Investors want government to stop propping up weak banks, and instead help the losers dissolve, says Axel Merk of Merk Investments. Holding up failed institutions has let executives pay themselves fat bonuses despite poor performance, he says.