Updated from 11:04 a.m. EDT

Stocks were sulking Thursday, as traders waited for the House of Representatives to follow up on the Senate's recent passage of a $700 billion

bailout plan

for financial firms.


Dow Jones Industrial Average

dropped 239 points to 10,592, and the

S&P 500

was losing 30 points to 1131. The


was slipping 57 points to 2012.

After the close of Wednesday's trading, the Senate passed the bailout bill with a 74-25 vote. The House of Representatives had rejected an earlier version of the proposal on Monday, and the

stock market

responded with one of its worst performances in recent memory. Among other revisions, the bill passed by the Senate included $110 billion in tax incentives aimed at fostering economic growth.

The House is expected to vote on the revised package Friday.

"I think, honestly, the Senate was kind of a foregone conclusion," said Michael Church, portfolio manager at Church Capital Management. He said that the real hurdle for the rescue package has been in the House, where local interests are holding lawmakers back from passing the bill. "You look at some of the stuff that got thrown on that thing, you have to shake your head and say that some of these guys are being bought," he said. Church also said that sentiment is so awful that a short-term surprise rally isn't out of the question.

Chris Johnson, CEO and chief investment officer at Johnson Research, said he's confident the bill will pass. He said it appears House lawmakers revised their opinion of the bill after the stock market dropped on Monday. The bill is also "aimed more at helping the common person, at least from a PR perspective," he said.

In an attempt at offering additional support to the stock market, the

Securities and Exchange Commission

extended through Oct. 17 a ban on short sales of financial stocks. The original ban had been slated to expire today.

Meanwhile, Swiss bank


(UBS) - Get Report

announced it would net a small third-quarter profit. Such an achievement would break a four-quarter losing streak for



Bank of America

(BAC) - Get Report

, which agreed on Sept. 14 to buy

Merrill Lynch


, said Merrill Chairman and CEO

John Thain

will join BofA as president of global banking, securities and wealth management in the combined firm. Current president of global corporate and investment banking Brian Moynihan at BofA will remain in a newly created position, the company said.

Elsewhere, the

Financial Times

reported that private equity firm

Kohlberg Kravis Roberts

, together with French electric company


were working on a

buyout deal


Constellation Energy



In the technology space,


said Japanese firm


was in discussions with data-storage company

Western Digital

(WDC) - Get Report

about a potential sale of

Fujitsu's hard-drive business


General Electric

(GE) - Get Report

announced a $12.2 billion common-stock offering priced at $22.25 a share.

Alan Mulally

, CEO of


(F) - Get Report

, said that the automakers would continue to face a tough global market until 2010 and added that his company would not be filling for bankruptcy.

Several companies reported earnings between Wednesday's and Thursday's sessions. Agricultural products maker


(MOS) - Get Report

said it made a profit that surged to $2.65 a share from 69 cents year over year but nonetheless missed analyst estimates.

Hotel operator


(MAR) - Get Report

reported declining profit and warned that 2009 would be a tough year.

Beverage concern

Constellation Brands

(STZ) - Get Report

, meanwhile, swung to a quarterly loss due to restructuring charges.

As expected, the European Central Bank kept its interest rate unchanged at 4.25% amid a dual threat of high inflation and an economic slowdown.

The day's economic data offered further reason for pessimism. The Department of Labor said that initial jobless claims for the week ended Sept. 27 rose by 1,000 to 497,000, the highest unemployment rate since 2001.

The Census Bureau reported that factory orders declined 4% in August, a sharp drop-off from a 0.7% increase in July and a weaker performance than the 2.9% decline anticipated by economists.

As investors look beyond the bailout package, they're turning again to the broader economy, said Chris Johnson. Today's unemployment data is hurting expectations for tomorrow's nonfarm payrolls report. A bottom in the market will take place over a very long term and won't be the type of "V" recovery everyone likes, he said.

In commodities, crude oil was down $2.83 to $95.70. Gold was losing $39.50 at $847.80.

Longer-term U.S. Treasury securities were higher in price. The 10-year was up 14/32 to yield 3.69%, and the 30-year was gaining 29/32, yielding 4.16%. The dollar was stronger against the euro and pound but falling vs. the yen.

Overseas, European exchanges were declining, while

Asia was mixed

. The FTSE in London and the DAX in Frankfurt were trading lower. The Hang Seng in Hong Kong finished on the upside, while Japan's Nikkei ended its session with losses.