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The Federal Reserve Takes Unprecedented Steps to Bailout Businesses.

WASHINGTON (AP) – Frantically trying to stop the bleeding on Wall Street, the Federal Reserve took a first-time step Tuesday to get cash directly to businesses and hinted that interest rates could come down soon.

Stocks continued their free fall anyway and hit new five-year lows.The central bank invoked emergency powers to lend money to companies outside the financial sector and buy up mounds of commercial paper, the short-term debt that firms use to pay for everyday expenses like salaries and supplies.

The Fed, which has only loaned money to banks before, made the move as the gravest financial crisis in decades wore on and concern spread around the world.

“The outlook for economic growth has worsened,” Bernanke said. “The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance.”

The gloomy assessment appeared to open the door wider to an interest rate cut on or before the Fed convenes again Oct. 28. The Fed’s key interest rate now stands at 2 percent.

Wall Street turned its back. The Dow Jones industrials lost 508 points, more than 5 percent, to close at 9,447, the lowest since Sept. 30, 2003. The Standard & Poor’s 500, a broader stock index, closed below 1,000 for the first time since that same day.