LONDON (AP) - European and U.S. stock markets sagged Tuesday as the Obama administration outlined a new bank rescue that could mobilize in excess of $1 trillion in public and private support to get frozen credit markets working again.

After opening modestly higher, the Dow Jones industrial average fell 315 points, or 3.5 percent, to 7,995.94, while the broader Standard & Poor's 500 index dropped 34.72 points, or 4 percent, to 835.17.

European shares widened their losses late in the day, closing lower as U.S. Treasury Secretary Tim Geithner was speaking about the rescue plans.

The FTSE 100 index of leading British shares closed down 94.53 points, or 2.2 percent, to 4,213.08, while Germany's DAX was down 161.28 points, or 3.5 percent, to 4,505.54. The CAC-40 index in France fell 114.12 points, or 3.6 percent, lower at 3,020.75.

U.S. Treasury Secretary Tim Geithner said the plan would bring the full force of the federal government to bear in partnership with the private sector, but markets seemed to crave more detail about how the government would get lending going again.

"Right now critical parts of our financial system are damaged," Geithner said. "Instead of catalyzing recovery, the financial system is working against recovery and that's the dangerous dynamic we need to change."

A major plank of the package unveiled by Geithner involves the creation of a public-private partnership to mop up toxic assets from the banks _ in effect to create a type of "bad bank."

Marc Ostwald, a strategist at Monument Securities, said the plan was still short on specifics that would have reassured markets more. "There are so many caveats, and missing or t.b.a details that it lacks the cohesion and clarity which would be necessary to boost confidence," he said.

The markets were also awaiting the Senate's approval of the $838 billion stimulus bill, which survived a key vote Monday. The plan must then be reconciled with an $819 billion version from the House of Representatives.

A government report that wholesalers cut inventories in December by the most in 16 years also weighed on the markets. The reduction means wholesalers ordered fewer goods, leading to reduced production and potentially more layoffs.

The Commerce Department said wholesale inventories plunged by 1.4 percent, nearly double analysts' expectations of 0.8 percent. It also was the fourth straight monthly decline.

Europe's markets were also hit by news that Swiss bank UBS AG lost 8.1 billion Swiss francs ($7.57 billion) in the fourth quarter and said it would cut another 2,000 jobs as it refocuses on its home market after a troubled year abroad.

Earlier in Asia, Japan's Nikkei 225 stock average fell 0.3 percent to 7,945.94, while Hong Kong's Hang Seng closed up 0.8 percent at 13,880.64 after swinging in and out of negative territory throughout the session.

South Korea's Kospi shed 0.3 percent to 1,198.87. Benchmarks in Australia, New Zealand, India the Philippines and Thailand also fell, while markets in Taiwan and Singapore rose.

In mainland China, Shanghai's key index _ which had surged about 12 percent over the last six trading days _ rebounded from the red to finish 1.8 percent higher. Chinese investors were encouraged by government data showing wholesale prices climbed in January compared with December, suggesting demand was rising.

Oil prices slipped, with light, sweet crude for March delivery down 38 cents to $39.18 a barrel on the New York Mercantile Exchange.

In currencies, the dollar weakened 0.8 percent to 90.71 yen, while the euro fell 0.3 percent to $1.2964.