Wall Street quit a late-session rally attempt during a volatile session Wednesday, ending lower as investors had mixed responses to new details on the U.S. Treasury's plan to stabilize the banking system. Stocks plunged in the morning on weak U.S. economic reports, but managed to reduce losses and turn higher in the afternoon after the U.S. bank plan's announcement, with several financial stocks rallying. Yet after the brief rally, stocks erased gains and turned lower again as investors continued to worry about the depth and duration of the recession. President Barack Obama told Congress on Tuesday night that the country “will rebuild, we will recover, and the United States of America will emerge stronger than before.” He outlined plans for creating jobs, stabilizing the credit markets, reforming health care, and improving schools. He is presenting his 10-year budget draft to Congress on Thursday. Meanwhile, the U.S. Treasury launched a “stress test” of the 19 banks with more than $100 billion in assets to see if they have enough capital to survive if unemployment rises to 10 percent and the housing market contracts another 20 percent. The testing will be completed by the end of April. In economic news, U.S. existing-home sales tumbled to an 11-year low in January, and median home prices fell to a six-year low, a private association reported. The Labor Department announced that “mass layoffs”—any single employer cutting 50 or more positions—surged in January and would likely continue to do so for several months. Light sweet crude oil for April delivery rose $2.54 to $42.50 a barrel on the New York Mercantile Exchange after the U.S. government reported rising demand for gasoline and a smaller-than-expected increase in U.S. crude inventories. The U.S. dollar gained versus the euro and the yen. The Dow Jones industrial average fell 80.05, or 1.1 percent, to 7,270.89. Shares of bank stocks were volatile after the Treasury's announcement. Citigroup ended lower, while J.P. Morgan Chase and Bank of America gained. General Motors (GM) also gained. The broader Standard & Poor's 500 index fell 8.24, or 1.1 percent, to 764.90. The technology-heavy Nasdaq composite index fell 16.40, or 1.1 percent, to 1,425.43. First Solar fell 18 percent in active trading after the solar-panel maker warned that first quarter and full-year revenue will decline from a year ago due to the weak U.S. economy. The New York Stock Exchange composite index fell 68.57 to 4,753.17. The American Stock Exchange composite index fell 7.09 to 1,311.96. And the Russell 2000 index fell 11.04 to 401.44.
