Read money adviser George Chamberlin's Business Report every weekday for details on the day's market activity and the latest on local stocks.
A lack of detail in the bank rescue plan discussed on Tuesday sent stock prices sharply lower. Investors had anticipated some clarification would be provided by the Treasury Secretary and Federal Reserve Board chairman in their testimony.
The Dow Jones industrial average fell 381.99 points to 7888.88. The Nasdaq composite index lost 66.83 points to 1524.73 and the S&P 500 stock index dropped 42.73 points to 827.16.
On the day, the S&P 500 fell 4.9 percent, the Dow dropped 4.6 percent, and the Nasdaq declined 4.2 percent.
Among local stocks: ViaSat fell $3.67 to $19.15; Qualcomm dropped $1.63 to $35.02; and, Genoptix closed at $33.48, down $1.08.
Secretary Tim Geithner laid out the strategy for the bank rescue program but came put short on details and timing. Especially lacking was detail on how to support the housing market.
At the same time, the markets gave little weight to the news that the Senate had approved its economic stimulus package that will now go into a conference committee to iron out differences with the plan approved by the House of Representatives.
Banks were hardest hit by the lack of action. Bank of America shares fell $1.33 to $5.56, a drop of 19.3 percent.
Oil prices fell on concerns the economy rescue action may still be months away. Crude closed at $27.55 a barrel, down $2.01. However, gold rebounded, up $21.40 to $914.20 an ounce.