With fears mounting of a deep recession that could spread to global markets, U.S. President George Bush signed into law a historic bill Friday afternoon which provides a US$700-billion lifeline to waning financial markets.

Bush said the law was essential in getting the country's sputtering economy back on track.

"We have acted boldly to help prevent the crisis on Wall Street from becoming a crisis in communities across our country," he said just after the vote.

Bush noted that the U.S. economy still faces "serious challenges" despite the massive fund.

"I believe government intervention should only happen when necessary," Bush told reporters in Washington on Friday.

Bush signed the bill into law on Friday afternoon, not long after the House of Representatives passed it by a count of 263-171.

He also worked to reassure taxpayers that they won't be picking up the final tab.

"In this situation, action is clearly necessary and ultimately the cost to taxpayers will be far less than the initial outlay."

Bush noted that while the government will soak up the financial sector's debts on Friday, those assets will go up in value as the economy recovers.

"And overtime, Americans should expect as much, if not all ... of the tax dollars back."

However, he warned that the bill's positive economic effects would take time.

"We'll take the time necessary to decide an effective program," he said, saying the bill's importance and timeliness are underscored by slumping job markets.

Though the plan, which was designed to renew investor confidence, is now law, the market reaction was mixed.

In Toronto, the S&P/TSX composite index lost 97.19 points to finish the day at 10,803.35. The late-day fall came after commodities helped push the index up by more than 400 points.

Meanwhile, the Dow Jones industrial average in New York dipped 157. 47 points to close the week at 10,325.38, and the Nasdaq composite index fell 29.33 points to 1,947.39.

The falling stock numbers were underscored by discouraging numbers from the U.S. job market and falling car sales.

According to the U.S. Labour Department, nearly 160,000 jobs were lost in September alone, marking the biggest drop in half a decade.

Before the vote, House Speaker Nancy Pelosi called it a vote for "Mr. and Mrs. Jones on Main Street."

The measure will let the government spend billions of dollars to buy bad mortgage-related securities and other devalued assets from troubled financial institutions.

Earlier on Friday, a 223-205 vote paved the way for the bailout to pass by preventing members from offering amendments that could slow the proceedings.

Democratic and Republican leaders spent Thursday convincing their colleagues to vote 'yes' on the plan.

The American public has also been given repeated warnings that the economy faces a grave future and action must be taken.

"We all know that we are in the midst of a financial crisis," said House Republican leader John Boehner moments before he cast his vote to support the bill.

"And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen."

Both candidates for the U.S. presidency, Barack Obama and John McCain, were busy trying to secure support for the deal by phoning reluctant lawmakers to ask for their help.

The Senate gave the plan a second life on Wednesday by voting 74-to-25 to approve the bailout.

They also attached extra measures to the bailout bill in an effort to sweeten the prospect of soliciting a 'yes' from some of the lawmakers who voted 'no' on Monday.

While the bill was a bi-partisan effort, some politicians still professed outrage over the bill.

According to Republican Representative Jeb Hensarling, the bill is tantamount to hypocrisy.

"How can we have capitalism on the way up and socialism on the way down?"