Stocks Stumble to Mixed Close

Additionally, the Mortgage Bankers Association said that mortgage applications slid nearly 20% last week, an indication that refinancing is grinding slower.

The reports come one day after the Fed proposed a plan to give borrowers more protection against predatory lending practices.

The housing data wasn't much better on the earnings front. After the last close, homebuilder Hovnanian (HOV Quote) posted a fourth-quarter loss that quadrupled from a year ago. Shares closed down 97 cents, or 11.6%, $7.43.

Among other companies out with earnings late, handheld device maker Palm (PALM Quote) posted a fiscal second-quarter loss and offered disappointing guidance. Video-game maker Take-Two (TTWO Quote) had a fourth-quarter loss that shrank from a year ago but still disappointed Wall Street analysts.

Palm lost 6.9% to $5.52, while Take-Two climbed 4% to $18.75.

Shares of Darden Restaurants (DRI Quote) fell more than 20% after the company reported fiscal second-quarter earnings that fell sharply from a year ago. Darden also said fiscal 2008 profits would come in below forecasts.

Ahead of the open, Morgan Stanley (MS Quote) reported a fourth-quarter loss of $3.61 a share and said it had to write down the value of its mortgage-related assets by $9.4 billion. Also, a Chinese investment group is putting $5 billion in the company. Morgan was higher by $2.09, or 4.4%, to end at $50.16.