NEW YORK (Reuters) - CIT Group Inc <CITGQ.PK>, the large U.S. consumer finance company, on Monday posted a $1.07 billion loss for the third quarter, the last full three-month period prior to its Chapter 11 bankruptcy filing.

A top economic adviser to U.S. President Barack Obama warned on Friday that the urgency for changing the rules of the road for financial firms may be waning and urged Congress to act while the general public is focused on banking issues.

A US bankruptcy judge set a December 8 hearing to consider approval of CIT Group's reorganization plan, aiding the large commercial lender's effort to emerge from bankruptcy by year's end.

A late rally helped propel the Dow to a positive finish Monday as financial stocks rebounded.

Stocks erased all of their gains Monday after an early surge due to a better-than-expected manufacturing report. Financials led the decline.

The Dow shot up more than 100 points Monday after a report showed manufacturing expanded more than expected last month.

The world will slump into a depression similar to that in the 1930s if stimulus measures are pulled out too soon, an economist warned. But investors have a chance to make good money in stock markets, a strategist said.

Stock futures pointed to a modest rebound ahead of the open Monday after the Dow and the S&P 500 experienced their biggest one-day percentage drops Friday since July 2.

CIT Group bankruptcy filing could push at least some small businesses it finances to look for a new lender, but finding new credit will be tough.

Commercial lender CIT Group filed for bankruptcy protection on Sunday afternoon.  The move comes after billionaire investor Carl Icahn threw his weight behind a bankruptcy filing last week.

Lender CIT Group has filed for Chapter 11 bankruptcy protection, a potential blow to the thousands of small and mid-sized businesses that rely on the company for loans.

Billionaire investor Carl Icahn, who had been trying to derail CIT Group's efforts to launch a restructuring plan, said on Friday he was now backing the lender's pre-packaged bankruptcy, making a filing as soon as this weekend more likely, analysts said.

Goldman Sachs plans to trim the rescue loan it arranged for CIT Group by $875 million to $2.125 billion, CIT said Friday.

The Obama administration's new proposal for tackling financial risk in the U.S. economy, unveiled just two days ago, came under attack Thursday from all sides, with critics targeting its funding and scope.

Commercial lender CIT Group, teetering on the brink of bankruptcy, said Wednesday it has secured $4.5 billion of additional financing.