Treasury's Paulson briefs Bush on market decline

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson briefed President Bush on Tuesday on the steep decline in the stock market, the White House said.

White House spokesman Tony Fratto said Bush got a briefing over the phone from Paulson. He declined to elaborate on the contents of the conversation.

"The president's economic advisers are keeping an eye on the markets. We believe that the economic fundamentals in the U.S. economy are sound," Fratto said.

Treasury spokeswoman Brookly McLaughlin said the President's Working Group of Financial Markets was monitoring the markets. "The president's working group regularly monitors markets and will continue to do so," McLaughlin said.

The high-level group is made up of the Federal Reserve chairman, Treasury secretary, chairman of the Securities and Exchange Commission and chairman of the Commodity Futures Trading Commission.

An administration official said Paulson's briefing for the president came as U.S. financial markets were closing on Tuesday.

The Dow Jones industrial average and the Standard & Poor's 500 Index both closed down more than 3 percent, their biggest one-day percentage drops in almost four years as a sell-off in the Chinese stock market fanned worries that stock valuations may be too high. The Nasdaq suffered its biggest fall since December 2002.

Growing anxiety about Iran's nuclear program also fed the brutal reversal of investor optimism.