The entity would be similar to the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s. The report, which indicated that Treasury Secretary Henry Paulson was looking into such a move, was originally reported by CNBC, and definitely boosted the market.

The market was "definitely rallying on the Paulson rumors," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

According to CNBC, Paulson will brief House Speaker Nancy Pelosi and other congressional leaders on the proposal tonight at 7 PM EDT.

It was confirmed that the meeting will include Senate and House leaders from both sides of the aisle, with Federal Reserve Chairman Ben Bernanke also attending.

"It's going to take a lot of the bad debt off the balance sheets of these companies," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York.

While the Paulson rumor had a large effect on the markets, President Bush's short statement today appeared to had none. He spoke for approximately two minutes, and said:

The American people are concerned about the situation in our financial markets and our economy, and I share their concerns.

I've canceled my travel today to stay in Washington, where I will continue to closely monitor the situation in our financial markets and consult with my economic advisors. I spoke to Secretary Paulson this morning, and I will meet with him later on today.

In recent weeks, the federal government has taken extraordinary measures to address the challenges confronting our financial markets. We've taken control of Fannie Mae and Freddie Mac -- the home finance agencies -- to help promote market stability and to ensure they can continue to play a role in helping our housing market recover. This week, the Federal Reserve acted to prevent the disorderly failure of the insurance company AIG -- a development that could have caused a severe disruption in our financial markets and threatened other sectors of the economy. Yesterday, the Security and Exchange Commission took action to strengthen investor protections and step up its enforcement actions against illegal market manipulation. Last night, the Federal Reserve, in coordination with central banks around the world, took a substantial step to provide additional liquidity to the U.S. financial system.

These actions are necessary, and they're important. And the markets are adjusting to them. Our financial markets continue to deal with serious challenges. As our recent actions demonstrate, my administration is focused on meeting these challenges. The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence.

Thank you.