Deja Vu: Stocks Dip After Big Gain

The euphoria on Wall Street was fleeting.

A day after the major indexes surgerd on the Treasury's plan to cleanse banks of as much as $1 trillion of their bad assets, stocks were lower on profit-taking and some questions over the viability of the program. Research from Bespoke Investment Group found that of 15 other 400-plus points gains, 13 were followed by down days. Tuesday that pattern repeated itself. The Dow Jones Industrial Average lost 115 points at 7660. The Nasdaq gave up 39 at 1516, and the S&P 500 dropped 16 at 806.

Most of the losses came in the financial and energy sectors. Air carriers also took a big hit on a trade group report predicting a $4.7 billion loss for the industry this year.

In Washington, Treasury Secretary Timothy Geithner told the House Financial Services Committee the Treasury should have the power to put troubled non-bank firms under government conservatorship and guarantee loans. "As we have seen with AIG, distress at large, interconnected, non-depository financial institutions can pose systemic risks just as distress at banks can," he said. "The administration proposes legislation to give the U.S. government the same basic set of tools for addressing financial distress at non-banks as it has in the bank context."

On Monday, Geithner broke out the details of his plan to help banks shed their toxic holdings in a hybrid sale to the public backed by the government.

Federal Reserve Chairman Ben Bernanke also addressed the committee and renewed his call for tighter regulation. "AIG highlights the urgent need for new resolution procedures for systemically important nonbank financial firms," he said in prepared testimony.

Tonight, President Obama will take his administration's plans for the economy to prime time. White House spokesman Robert Gibbs said the speech was intended to promote transparency with the American people. "They may or may not like all the decisions that he makes, Gibbs said, "but I think he believes it's important that they understand why he's making the decisions that he is."

In energy, oil prices dipped before the open. Crude traded down 26 cents at $53.54 a barrel.

World markets were mixed. In Asia, traders cheered the rally in the U.S. Japan's Nikkei and Hong Kong's Hang Seng each picked up more than 3.3%. In the U.K., the FTSE stood down 1.5% in afternoon trading.