NEW YORK, Oct. 7 (UPI) -- The U.S. Federal Reserve's plan to purchase three-month, unsecured and asset-backed debt was answered with tumbling stock indexes Tuesday.

Stocks fell over 5 percent on three major stocks as the Fed moved closer to direct lending to businesses, which use short term commercial paper to fund many expenses, including payrolls.

Once steady Bank of America fell 24.09 percent Tuesday as financial firms continue to struggle with choked-off credit markets.

The Dow Jones industrial average, up 53 points early, fell 5.11 percent decline, losing 508.39 points to 9,447.11. The Standard and Poor's 500 lost 60.66 points, to 996.23, down 5.74 percent. The Nasdaq composite index fell 5.80 percent to 1,754.88, down 108.08 points.

On the New York Stock Exchange, 386 stocks advanced and 2,814 declined on a volume of 9.52 billion shares traded.

The benchmark 10-year U.S. Treasury bond fell 12/32 to yield 3.503 percent.

The dollar fell. The euro rose to $1.3607, compared to $1.3519 Monday. Against the Japanese yen, the dollar fell to 101.40 yen, up from 101.61 yen.

In Tokyo, the Nikkei average lost 317.19 points to 10,155.90, off 3.03 percent.

In London, the FTSE 100 index gained slightly, up 0.35 percent to 4,605.20, gaining 16.00 points.

WASHINGTON, Oct. 7 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke said Tuesday the central bank would reassess its monetary policy, indicating a federal fund rate cut was possible.

In light of these (recent) developments, the Federal Reserve will need to consider whether the current stance of policy remains appropriate, Bernanke said in a speech at the National Association for Business Economics 50th Annual Meeting in Washington.

The Federal Reserve will continue to use the tools at its disposal to improve market functioning and liquidity, Bernanke said.

Bernanke said losses suffered by many banks and non-bank financial firms … has made has made investors extremely reluctant to bear credit risk, resulting in further declines in asset prices and a drying up of liquidity in a number of funding markets.

The sluggishness of real incomes, together with tighter credit and declining household wealth, is now showing through more clearly to consumer spending, he said.

In turn, less spending slows the economic engine. Overall, the combination of the incoming data and recent financial developments suggests that the outlook for economic growth has worsened, Bernanke said.

ALBANY, N.Y., Oct. 7 (UPI) -- The New York Attorney General's Office said Tuesday it had reached a $62 million settlement with Eli Lilly and Co. on alleged misleading marketing of a drug.

New York, along with 32 other attorneys general, had pressed claims concerning the antipsychotic drug Zyprexa, which was marketed for off-label uses, the New York office said.

The drug company promoted the drug, which is approved for schizophrenia and certain types of bipolar disorder, for potentially dangerous uses including pediatric use, use at high dosage levels, use for the treatment of symptoms rather than diagnosed conditions and (for) the elderly … suffering from dementia, the statement said.

The drug company also failed to adequately disclose the drug's potential side effects, which include weight gain, hyperglycemia and diabetes, the statement said.

The citizens of New York State should be able to rely on their doctor's advice for prescriptions without having to worry about drug companies manipulating them, said New York Attorney General Andrew Cuomo.

In the deal, Eli Lilly agreed to stop making false claims concerning Zyprexa and provide a list of healthcare professionals paid more than $100 for promotional speaking or consulting on Zyprexa's use.

CHICAGO, Oct. 7 (UPI) -- Boeing's Chairman and Chief Executive Officer Jim McNerney said the U.S. airplane maker wouldn't bow to a key demand of striking machinists.

The five-week strike of 26,000 union machinists that has halted production at Boeing includes a demand the union be able to bid on more of the company's outsourced work.

In a lengthy e-mail message to employees Monday, McNerney said, the ongoing turmoil in the financial markets provides a timely reminder of why it would be gravely unwise for Boeing to agree to terms in any contract that would fundamentally restrict our ability to manage our business, the Seattle Post-Intelligencer reported.

McNerney's e-mail said automakers all but fatally wounded themselves years ago by promising unsustainable wage and benefit levels and by agreeing to contract conditions (including job guarantees) that limited their flexibility to run their businesses in the face of intense global competition.

In direct contrast to McNerney's note, Mark Blondin, lead negotiator for International Association of Machinists and Aerospace Workers, said the union is has made it clear that protection of IAM jobs and the scope of the IAM work is critical to getting a ratified agreement.