A boost in financials wasn t enough to stop broader selling Wednesday. Stocks and ETFs struggled as economic data and earnings sent mixed signals.

The Dow Jones Industrial Average fell 122 points, or 1.1%, to 10603. The S&P 500 dropped 12, or 1.1%, to 1138, and the Nasdaq edged down 29, or 1.3%, to 229.

Some of the selling pressure came out of China. "They are supposed to lead us out of the recession, and now that they re talking about cutting back, it makes people nervous." says Doug Roberts, chief investment strategist at ChannelCapitalResearch.com. "There s almost a fear that governments may be starting to pull back not just ours, but around the world."

Nervousness and some worries that the recovery may take more of a U shape than a V shape have prompted people to take a few chips off the table, Roberts says. But there are still a slew of major earnings reports to go and a batch of economic data left in the week. It s early, he says.

IBM weighed on the Dow, losing as much as 3% a day after it topped earnings estimates and raised guidance. Investors were disappointed in the top line.

Financials were mostly higher, with the KBW Bank index rising 1.4%, after a mixed batch of bank earnings. Morgan Stanley was trading lower after a miss. But Bank of America, Bank of New York Mellon (BK) and Wells Fargo all traded higher after posting quarterly results. Bank of America reported a narrowed but disappointing loss. The bank's credit losses also rose to $10.11 billion, up from $8.53 billion a year earlier. Meanwhile, Wells Fargo reported a profit of $2.82 billion, or eight cents a share, up from a year-earlier loss of 84 cents. Analysts had forecast a loss of a penny a share on $22 billion in revenue.

Economic data were lukewarm. Housing starts fell by more than expected to 557,000 in December, down from 580,000 the month prior. But building permits rose by more than expected to 653,000, up from 589,000 and well above estimates.

The Philadelphia Fed index and weekly data on jobless claims are due out later in the week.

Stocks overseas were lower. In Europe, the FTSE in London and Dax in Frankfurt lost 1.7% and 2.1%, respectively. In Asia, the Nikkei in Japan fell 0.3%, while the Hang Seng in Hong Kong gave up 1.8%.

For a detailed rundown on Wednesday s trading session see our market story.

Winners

Financials did well after the latest batch of bank earnings, with the KBW Bank index rising 1.4%. The SPDR Series Trust: SPDR KBW Bank ETF and the iShares Trust: iShares Dow Jones US Regional Banks Index Fund climbed 1.3% each.

Losers

Internationally-focused ETFs were hard hit as investors worried that the Chinese government and possibly others would curb spending. Direxion Shares ETF Trust: Direxion Daily Developed Markets Bull 3X Shares and ProShares Trust: Ultra MSCI EAFE ProShares fell 6.3% and 5.3%, respectively.

Thursday s Notebook

Earnings and Conference Calls
American Express, Associated Banc-Corp, BancorpSouth, Brookline Bancorp, Burlington Northern Santa Fe, Capital One Financial, Comerica, Conexant Systems, Consolidated Edision, Continental Airlines, Cubist Pharmaceuticals, Digi International, Electronics for Imaging, Emulex, EZCorp, Fairchild Semiconductor International, Fifth Third Bancorp, First Niagara Financial Group, First Security Group, Freeport-McMoRan Copper & Gold, GATX, Goldman Sachs, Google, ICIC Bank, Imation, Independent Bank, Insteel Industries, Interactive Brokers Group, International Game Technology, Intuitive Surgical, ITT Educational Services, J&J Snack Foods, KeyCorp. Knight Capital Group, Legg Mason, LSI Industries, Matthews International, MDS, Meredith, Meridian Biosicience, Microsemi, NetScot Systems, OceanFirst Financial, Pacific Continental, People's United Financial, PNC Financial Services Group, PPG Industries, Precision Castparts, Simmons First National, Somanetics, Southwest Airlines, Sterling Bancshares, TCF Financial, Twin Disc, Union Pacific, United Development, UnitedHealth Group, Urologix, Valley National Bancorp, Westamerica Bancorporation, Western Alliance Bancorp, Western Digital, Wilshire Bancorp, WNS Holdings, Xerox

Economic Data
8:30 a.m. Jobless Claims
10:00 a.m. Leading Indicators
10:00 a.m. Philadelphia Fed Survey
10:30 a.m. EIA Natural Gas Report
11:00 a.m. EIA Petroleum Status Report
4:30 p.m. Fed Balance Sheet
4:30 p.m. Money Supply