WASHINGTON — To the victor goes the mess.

Barack Obama's presidential election victory comes with an albatross of a prize — an economy beset by a stubborn housing slump and the worst financial crisis in 70 years.

Consumers and businesses are sharply reducing their spending and the government is awash in red ink.

"He will inherit an economy that is in recession and ... is likely to get worse before it gets better," said Stuart Hoffman, chief economist for PNC Financial Services.

The current administration today will detail its plans to borrow a record $550 billion in the final three months of the year as a down payment for the various financial rescue packages put into effect in response to the global crisis.

A Treasury Department official on Monday projected the government would need to borrow an additional $368 billion in the first quarter of 2009. Treasury is expected to bring back its three-year notes to help cover the increased borrowing needs.

Still, investors seemed to draw hope Tuesday from the selection of a new presidential administration, while shrugging off the latest in a series of grim economic reports. The Dow Jones industrial average surged more than 300 points. The Dow and the other major stock indexes all finished with gains of more than 3 percent.

Asian stocks rallied today on the back of Wall Street's gains and renewed investor confidence. Asian investors were hopeful Obama would tackle the U.S. financial crisis with renewed vigor, although some voiced concerns that a Democratic president and Congress might turn more protectionist. Japan's Nikkei 225 stock average climbed 4.5 percent, while Hong Kong's Hang Seng index rose 3.2 percent.

Futures trading fell after initially rising. Dow futures fell 126, or 1.3 percent, to 9,461, while S&P futures declined 1.5 percent to 988.4.

Analysts said investors appeared to be looking forward to the end of political uncertainty and hoping the new U.S. president will move to boost the economy, which got another bit of dismal news Tuesday.

The Commerce Department reported Tuesday factory orders dropped 2.5 percent in September from August, more than three times as much as analysts had expected.

The weakness was led by a heavy drop in nondurable goods orders, which fell 5.5 percent. That included a 17 percent drop in the value of petroleum and coal products, reflecting the decline in oil and gas prices in September.