Stocks sputter after rally

Wall Street pulls back after previous session's run as economic worries remain.

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By staff

NEW YORK ( -- Stocks slipped Wednesday morning as investors pulled back after the previous session's rally and amid ongoing worries about the financial sector and the economy.

The Dow Jones industrial average (INDU) lost 42 points, or 0.6%. The S&P 500 (SPX) index fell 6 points, or 0.8%. The Nasdaq composite (COMP) declined by 14 points, or 1%.

On Tuesday, stocks bounced off 12-year lows with strong gains, as investors seemed to gather some hope from Federal Reserve Chairman Ben Bernanke's congressional testimony. The Dow rose 236 points, while the Nasdaq composite was up 3.9% and the S&P 500 added 4%.

But analysts were skeptical of the market's ability to continue the rally Wednesday.

"It really is bounce or bust time for these U.S. markets," said David Jones, chief market strategist at IG Markets. "They just can't hold on to any decent rallies."

Global markets rallied Wednesday. In Asia, Japan's Nikkei index ended up 2.7%. European indexes were higher in midday trading.

Obama: President Obama, addressing both houses of Congress for the first time, said the nation will battle its way out of the current recession. (Full story)

"We will rebuild, we will recover, and the United States of America will emerge stronger than before," said Obama.

Among other highlights, the president said the budget he will present this week will focus on health care reform, energy independence and education. He also said that despite its lack of popularity, aiding the nation's banks is necessary to restart the lending activity needed to grow the economy.

Economy: At around 10 a.m. ET, the January report on existing home sales is due for release. The annual rate is expected to have risen to 4.81 million units from 4.74 million in December, according to a consensus of economists surveyed by

Two other reports due after the open are the Labor Department's report on mass layoffs in January and the Energy Department's weekly report on oil inventories.

Fed chief Ben Bernanke is back on Capitol Hill. He'll give the House Financial Services Committee pretty much the same testimony he gave the Senate Banking Committee on Tuesday. That testimony, which indicated the nation could start to the come out of the recession later this year, helped push stocks higher.

Oil and money: Oil prices rose 80 cents a barrel to $40.76 on the New York Mercantile Exchange. The dollar rose against major international currencies including the yen, the euro and the British pound. To top of page

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