WASHINGTON, Sept. 29 (Xinhua) -- The White House and Congress on Monday scrambled to figure out the next move to avoid economic calamity after the House of Representatives rejected a 700 billion dollar bailout legislation earlier in the day.

    The failure of the proposal on a 228-205 vote sent stock markets into a nosedive. The Dow Jones industrial average closed down 777.68 points, recording a fall of nearly 7 percent -- its largest closing point drop in history.

    The Standard & Poor's 500-stock index and the tech-heavy Nasdaq each lost about 9 percent.

    The White House reacted immediately. President George W. Bush told reporters he was disappointed at the House's rejection of theplan, while pledging to "address this economic situation head on."

    "I was disappointed in the vote with the United States Congress on the economic recovery plan," Bush told reporters at the White House. "We'll be working with members of Congress, leaders of Congress, on the way forward."

    President Bush met with Treasury Secretary Henry Paulson and other top advisers at the White House later Monday.

    Federal Reserve Chairman Ben Bernanke and Vice President Dick Cheney also attended the meeting, White House spokesman Tony Fratto said.

    Paulson and White House officials will be talking to House and Senate leaders about getting legislation back on track and also discuss other options for stabilizing financial markets, Fratto said.

    Paulson, an advocate of the rescue plan, said after the meeting that he was also disappointed at the failure of the proposed plan, but he was also committed to working out a solution with Congress.

    "I'm very disappointed in today's vote. But leaders on both sides of the aisle have worked very hard. I've spoken to them, and I know they share my great disappointment," he said.

    "I'm going to be continuing to consult with congressional leaders to find a way forward to get something done as soon as possible. We need to get something done," he said. "We've got much work to do, and this is much too important to simply let fail."

    Analysts believe that many lawmakers said "No" because of political considerations, though some Republicans cited ideological objections while some others complained about haste and secrecy in assembling the plan.

    Paulson presented the original plan more than a week ago, which foresees the use of tax dollars to buy up bad debt from financial institutions staggered by the sub-prime mortgage crisis.

    The plan was rejected by some Republicans who want an alternative plan under which the government would provide insurance to companies that agree to hold frozen assets.

    But lawmakers had agreed on details of the bailout bill Sunday after marathon talks, authorizing the largest financial intervention by the U.S. government since the Great Depression.

    "People's re-elections played into this to a much greater degree than I would have imagined," said Representative Deborah Pryce of Ohio, a former member of the Republican leadership who is retiring this year and voted for the plan.

    Many lawmakers said they would proceed and bring a new bill to a vote later this week after the Jewish New Year holiday of Rosh Hashanah, which began at sundown Monday and runs through Wednesday night.

    "Americans are angry, and so are my colleagues," House Minority Leader John A. Boehner told reporters after the vote.

    "We need to renew our efforts to find a solution that Congress can support," he said.

    "We'd like to find a way to deliver enough Republican votes to make this happen," said Representative Roy Blunt, the minority whip.

    More than two-thirds of Republicans and 40 percent of Democrats opposed the bill.

    "The legislation may have failed, the crisis is still with us," House Speaker Nancy Pelosi, a Democrat, told reporters after the defeat.

    "What happened today cannot stand," she said. "We must move forward, and I hope that the markets will take that message."

    The White House hopefuls, Republican Senator John McCain and Democratic Senator Barack Obama, also called on the Congress to take swift action.

    Obama said he had been on the telephone with Paulson and Pelosi along with other congressional leaders.

    "It's important for the markets to stay calm because things are never smooth in Congress and to understand that it will get done," he emphasized.

    McCain also said that now was not the time to fix the blame. "Our leaders are expected to leave partisanship at the door and come to the table to solve our problems," he said.

    The U.S. Chamber of Commerce sent a letter to members of Congress, urging them not to adjourn until it passes legislation to stabilize the market.

    "Today's failure to approve legislation addressing the financial crisis has resulted in uncertainty and turmoil that have dramatically affected the markets and lowered equity prices, eroding individual savings and destroying billions of dollars of household wealth," wrote Bruce Josten, the chamber's top lobbyist.

    "Make no mistake," said the letter, warning that when the aftermath of congressional inaction becomes clear, "Americans will not tolerate those who stood by and let the calamity happen."