WASHINGTON – President-elect Obama plans to use his executive powers to make an immediate impact when he takes office, perhaps reversing Bush administration policies on stem cell research and domestic drilling for oil and natural gas.

John Podesta, Obama's transition chief, said Sunday Obama is reviewing President Bush's executive orders on those issues and others as he works to undo policies enacted during eight years of Republican rule. He said the president can use such orders to move quickly on his own.

"There's a lot that the president can do using his executive authority without waiting for congressional action, and I think we'll see the president do that," Podesta said. "I think that he feels like he has a real mandate for change. We need to get off the course that the Bush administration has set."

Podesta also said Obama is working to build a diverse Cabinet. That includes reaching out to Republicans and independents — part of the broad coalition that supported Obama during the race against Republican John McCain. Defense Secretary Robert Gates has been mentioned as a possible holdover.

"He's not even a Republican," Senate Majority Leader Harry Reid of Nevada said. "Why wouldn't we want to keep him? He's never been a registered Republican."

Obama was elected on a promise of change, but the nature of the job makes it difficult for presidents to do much that has an immediate impact on the lives of average people. Congress plans to take up a second economic aid plan before year's end — an effort Obama supports. But it could be months or longer before taxpayers see the effect.

Obama could use his executive powers to at least signal that Washington is changing.

"Obama's advantage of course is he'll have the House and the Senate working with him, and that makes it easier," said Carl Tobias, a law professor at the University of Richmond. "But even then, having an immediate impact is very difficult to do because the machinery of government doesn't move that quickly."

Presidents long have used executive orders to impose policy and set priorities. One of Bush's first acts was to reinstate full abortion restrictions on U.S. overseas aid. The restrictions were first ordered by President Reagan and the first President Bush followed suit. President Clinton lifted them soon after he occupied the Oval Office and it wouldn't be surprising if Obama did the same.

Executive orders "have the power of law and they can cover just about anything," Tobias said in a telephone interview.

Bush used his executive power to limit federal spending on embryonic stem cell research, a position championed by opponents of abortion rights who argue that destroying embryos is akin to killing a fetus. Obama has supported the research in an effort to find cures for diseases such as Alzheimer's. Many moderate Republicans also support the research, giving it the stamp of bipartisanship.

On drilling, the federal Bureau of Land Management is opening about 360,000 acres of public land in Utah to oil and gas drilling. Bush administration officials argue that the drilling will not harm sensitive areas; environmentalists oppose it.

"They want to have oil and gas drilling in some of the most sensitive, fragile lands in Utah," Podesta said. "I think that's a mistake."

Two top House Republicans said there is a willingness to try to work with Obama to get things done. But they said to expect Republicans to serve as a check against the power held by Obama and Democratic leaders in Congress.

"It's going to be a cheerful opposition," said Rep. Mike Pence, R-Ind. "We're going to carry those timeless principles of limited government, a strong defense, traditional values, to the American people."

Pence, of Indiana, is expected to take over the No. 3 leadership post among House Republicans.

In other transition matters, Obama's new chief of staff, Rahm Emanuel, would not say whether Obama would return to the Senate for votes during the postelection session this month. Obama's presence would be extraordinary, given his position as president-elect, especially if Congress takes up a much-anticipated economic stimulus plan.

"I think that the basic approach has been he's going to be here in Chicago, setting up his economic, not only his economic team, but the policies he wants to outline for the country as soon as he gets sworn in, so we hit the ground running," Emanuel said.

Also, Emanuel would not commit to a Democratic proposal to help the auto industry with some of the $700 billion approved by Congress to for the financial bailout.

Reid and House Speaker Nancy Pelosi, D-Calif., said in a letter Saturday to Treasury Secretary Henry Paulson that the administration should consider expanding the bailout to include car companies.

Podesta appeared on "Fox News Sunday," as did Pence, and CNN's "Late Edition," where Reid also was interviewed. Emanuel spoke on ABC's "This Week" and CBS' "Face the Nation."

_{NEW YORK – A disheartened Wall Street fell for the third straight session Wednesday as investors absorbed another series of dismal corporate reports and news that the government won't buy banks' soured mortgage assets after all. The Dow Jones industrials skidded more than 410 points, and all the major indexes dropped more than 4 percent.}

_{The market started the day falling on more signs that companies are being hurt by a severe pullback in consumer spending. Macy's Inc. said it lost $44 million in the third quarter as sales at the department store retailer fell more than 7 percent. And consumer electronics retailer Best Buy Co. slashed its fiscal 2009 guidance on fears that consumer spending will erode even further.}

_{Meanwhile, Morgan Stanley, suffering from the ongoing losses on Wall Street, outlined plans to cut 10 percent of staff in its institutional securities group — its biggest business that covers everything from investment banking to stock trading.}

_{The bleak reports, which followed disappointing news from coffee retailer Starbucks Corp. and homebuilder Toll Brothers Inc. earlier in the week, made it increasingly clear to investors that companies across the economy are suffering from the aftermath of the housing and credit crises.}

_{"There just doesn't appear to be an end in sight to the bad news," said Anton Schutz, portfolio manager of the Burnham Financial Industries Fund and the Burnham Financial Services Fund. "The selling is relentless."}

_{There was more pain at mid-morning, when Treasury Secretary Henry Paulson said the government's $700 billion financial rescue package won't purchase troubled assets from banks. He said that plan would have taken too much time, and that the Treasury instead will rely on buying stakes in banks and encouraging them to resume more normal lending.}

_{While the market had been pleased by the government's decision weeks ago to buy banks' stock, investors still hoped to see the financial industry relieved of the burden of the mortgage assets whose decline in value helped set off the nation's financial crisis. His comments, which underscored the anxiety that remains about the health of the financial system, sent stocks falling further.}

_{Analysts believe the market is in the process of retesting the intraday low hit on Oct. 10, when the blue chips fell to 7,882.50.}

_{"We're just going through the typical process of testing and retesting," said Matt King, chief investment officer of Bell Investment Advisors. "If we can continue to build higher and higher lows, that's definitely a positive. If the Dow can build a base above 8,100 and bounce off that, we see that as a definite technical positive."}

_{The selling accelerated in the last hour of the day, as it has done in most sessions over the past two months.}

_{"When there is a lot of volatility, especially on a big down day, people just decide they don't want to own stocks overnight," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research. "News doesn't drive this lower, fear does. Investors will back the next morning after they see where things settled."}

_{Late-day volatility has also been fed by hedge and mutual funds selling as investors withdraw money from the market.}

_{According to preliminary calculations, the Dow shed 411.30, or 4.73 percent, to 8,282.66. It was the lowest close for the Dow since its 5 1/2-year low of 8,175.77 reached on Oct. 27.}

_{The broader Standard & Poor's 500 index dropped 46.65, or 5.19 percent, to 852.30, and the Nasdaq composite index stumbled 81.69, or 5.17 percent, to 1,499.21.}

_{The Russell 2000 index of smaller companies fell 29.49, or 6.11 percent, to 452.80.}

_{Declining issues overwhelmed advancers by more than 10 to 1 on the New York Stock Exchange, where volume came to 1.46 billion shares.}

_{Though Paulson's announcement marks a major shift in the original bailout plan and rattled investors, Wall Street analysts generally believe the Treasury is now on the right path.}

_{"That's really what they should have done originally," said King. "First and foremost, we have to make sure banks are going to survive and then we can worry about lending. This is the quickest and most efficient way to do that."}

_{"Buying bad assets doesn't do that," he said.}

_{However, there is some concern that the bailout funds are being depleted rather quickly, said Jason O'Donnell, senior research analyst at Boenning & Scattergood.}

_{"Investors are generally in favor of the emphasis on the capital purchase provisions," O'Donnell said. But, "we're down quickly to a small portion of total funds remaining for other purposes."}

_{Paulson also announced a new goal for the program to support financial markets that supply consumer credit in such areas as credit card debt, auto loans and student loans. He said, "with a stronger capital base, our banks will be more confident" to support economic activity.}

_{But investors are worried that a severe pullback in consumer spending — which drives more than two-thirds of the U.S. economy — will prolong a global economic downturn.}

_{Macy's shares fell $1.04, or 11 percent, to $8.37. Best Buy shares tumbled $1.91, or 8 percent, to $21.97.}

_{The future of the country's top automakers remained a major concern on the Street as well, as investors waited to see whether the government would put together a bailout plan for General Motors Corp., Ford Motor Co. and Chrysler.}

_{General Motors was the only gainer among the 30 Dow stocks Wednesday, rising 16 cents, or 5.5 percent, to $3.08. Ford gained 4 cents, or 2.2 percent, to $1.84.}

_{Morgan Stanley, which converted into a bank holding company in September, said it plans to scale back its institutional securities business before the end of the year. The layoffs it plans are in addition to a 10 percent cut made earlier this year to the group.}

_{Morgan Stanley also plans to restructure its money management business by cutting 9 percent of the group's work force. The securities firm employs about 44,000 people worldwide. Morgan Stanley shares fell $2.14, or 15.2 percent, to $11.94.}

_{Meanwhile, American Express Co. is said to be seeking about $3.5 billion from the government to help boost its balance sheet, according to a report in The Wall Street Journal citing people familiar with the situation. AmEx, the No. 4 U.S. credit card issuer, won approval Monday from the Federal Reserve to become a bank holding company, which gives it the ability to grow a large deposit base and access financing from the Fed.}

_{AmEx shares dropped $2.35, or 10.5 percent, to $20.05.}

_{Government bond prices, which did not trade Tuesday because of Veterans Day, moved higher as investors looked for safer investments. The three-month Treasury bill's yield fell to 0.16 percent from 0.22 percent late Monday, and the yield on the benchmark 10-year Treasury note fell to 3.67 percent from 3.76 percent late Monday.}

_{Lower yields indicate stronger demand.}

_{Crude dropped below $57 a barrel Wednesday on the growing realization that global economic growth next year will slow more than originally feared, cutting demand for crude products such as gasoline. Light, sweet crude fell $3.50, or nearly 6 percent, to settle at $56.16 a barrel on the New York Mercantile Exchange.}

_{The dollar was mixed against other major currencies, while gold prices dipped.}

_{Overseas, Japan's Nikkei closed down 1.29 percent and Hong Kong Hang Seng fell 0.73 percent. In Europe, London's FTSE 100 fell 1.52 percent, Germany's DAX fell 2.96 percent, and France's CAC-40 dropped 3.07 percent.}