Stocks lower as bank worries continue, home sales fall

NEW YORK -- Stocks fell again Wednesday again as worries about the banking and housing industries piled up.

The market was led by banking stocks that dropped amid ongoing uneasiness about the steps the government will take to help struggling financial companies. The Obama administration is planning to begin "stress tests" on the nation's biggest banks Wednesday to determine how they would fare if the economy worsened.

Meanwhile, more bad news about the housing market left some traders too nervous to hang onto stocks they snapped up a day earlier, when the Dow Jones industrials rose 236 points. The National Association of Realtors said sales of existing homes fell 5.3% to an annual rate of 4.49 million last month, from 4.74 million units in December. It was the worst showing since July 1997, and Wall Street had expected sales would rise.

"What we're seeing is a lack of follow-through to yesterday," said Uri Landesman, head of global growth strategies at ING Investment Management. "Everybody is already discounting a horrible year this year. The question is, when are people going to see a turn? They've been burned so badly it's going to be in their interest to be as conservative as possible before it's clear that a turn has come."

Investors are also watching Federal Reserve Chairman Ben Bernanke, who giving a second day of testimony before Congress. Facing tough questions about the government's controversial bank-rescue efforts, Bernanke told the House Financial Services Committee that without these moves, the U.S. recession would have been even deeper. On Tuesday, Bernanke told Congress the recession might end this year, and that regulators aren't planning to nationalize banks — which has been a big fear among investors.