Bad news from the Federal Reserve sent stocks plunging 733 points Wednesday, the second-biggest drop in the market’s history.

The Dow Jones Industrial Average closed at 8,577. The Nasdaq dropped 150 points today to 1,628.

The report released this morning by the Department of Commerce shows economic activity, including consumer spending and manufacturing, has weakened across the nation.

Retail sales dropped 1.2 percent last month, the largest drop in three years. It’s the third consecutive month of losses.

Automotive sales dropped 3.8 percent, due to a lack of available financing. Sales at furniture, department and appliance stores all dropped as well.

Speaking to the Economic Club of New York, Federal Reserve Chairman Ben Bernanke tried to reassure Americans, saying the $700 billion rescue package gives the government the tools it needs to respond to the economic challenges, but it will take time.

“Although much work remains and more difficulties lie ahead, I remain confident that the American economy with its great intrinsic vitality and aided by the measures now available will emerge with renewed vigor,” he said.

In a statement at the White House this morning, President George W. Bush said the government’s latest plan to buy shares in banks is temporary.

The plan is designed so that shares will eventually be sold back and banks will remain under private control.

Meanwhile G8 leaders say they will meet to decide on actions to fix the global financial crisis.

In a statement released by the White House, the leaders say they are committed to resolving the crisis by strengthening their financial institutions and restoring confidence. The statement said the leaders would meet in the near future.

There is also word that 27 European Union leaders are endorsing a continent-wide emergency bailout for banking sector.