TOPWRAP 14-U.S. bailout rejected; fear seizes markets

* U.S. lawmakers reject $700 billion bailout plan

* Stocks plunge, investors rush to gold and govt bonds

* Citigroup to acquire Wachovia operations

* Fortis, Britain's Bradford & Bingley partly nationalized

By Kevin Drawbaugh and Eddie Evans

WASHINGTON/NEW YORK (Reuters) - U.S. lawmakers rejected a $700 billion bailout plan for the financial industry in a shock vote that sent global markets sliding as European authorities scrambled to prop up a slew of banks.

The Dow Jones industrial average .DJI posted its biggest point loss ever while the tech-heavy Nasdaq .IXIC plummeted 9 percent -- its biggest daily loss since the dotcom bubble burst in 2000. Latin American stocks tumbled 13 percent, their biggest decline in more than a decade. [nN29388741]

Even before the vote, Asian and European markets had plummeted on fears the crisis was spreading, while U.S. regional lender Wachovia WB.N became the latest big bank to succumb to the crisis. [n29384481]

And global money markets were frozen even as central banks poured hundreds of billions of dollars into the financial system to persuade financial firms to stop hoarding cash.[nN29384481]

"There's a monster amount of fear out there. This is global contagion. It's no longer just the United States," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The House of Representatives voted 228-to-205 against a compromise bailout plan that would have allowed the Treasury Department to buy up toxic assets from struggling banks. House Republicans, in particular, balked at spending so much taxpayer money just before the Nov. 4 U.S. elections.

"I can't believe they weren't able to come together and come up with a solution. Complete disaster was predicted if it didn't pass," said Stephen Berte, senior equity trader at Standard Life in Boston. "I can't see what the upside is right now."

Investors rushed to assets considered a safe haven. Government bond prices and gold jumped, and oil fell below $99 per barrel on the view that world demand will contract as the financial crisis puts the brakes on economic activity. [nN29346645]

U.S. BAILOUT PROSPECTS UNCERTAIN

In Washington, the failure of the bailout bill -- after more than a week of intensive closed-door negotiation intended to hammer out a compromise plan -- brought new uncertainty about the response of the U.S. government to the worst financial crisis since the Great Depression.

U.S. President George W. Bush was set to huddle with economic advisers to consider the administration's next move after the White House failed to win support for the bailout plan from Bush's fellow Republicans.