Stocks Sink on More Economic Data

Updated from 2:19 p.m. EDT

Stocks in New York were mired in negativity Wednesday afternoon, as traders took in a broad array of gloomy economic data and assessed comments from Federal Reserve Chairman Ben Bernanke.

The Dow Jones Industrial Average was losing 467 points to 8844, and the S&P 500 was lower by 61 points at 937. The Nasdaq dropped 91 points to 1690.

Bernanke addressed the financial crisis in a speech before the Economic Club of New York Wednesday afternoon. Bernanke said a "loss of confidence by investors and the public in the strength of key financial institutions and markets" lies at the heart of the problem and that's why the government acted preemptively.

"The crisis will end when comprehensive responses by political and financial leaders restore that trust, bringing investors back into the market and allowing the normal business of extending credit to households and firms to resume," Bernanke said. "I am not suggesting the way forward will be easy, but I strongly believe that we now have the tools we need to respond with the necessary force to these challenges."

On Tuesday, stocks finished with modest losses, as traders digested the Treasury Department's plan to take a $250 billion equity stake in U.S. banks. The government investment is part of the larger $700 billion Troubled Asset Relief Program to provide assistance to struggling financial firms.

Ahead of Wednesday's trading, the Federal Reserve said that Pimco, a unit of Allianz ( AZ), would be the custodian of the government's Commercial Paper Funding Facility, which will buy three-month commercial paper to support money markets.

If you liked this article you might like

BofA Capital Levels Fine, CFO Says

BofA Capital Levels Fine, CFO Says

Financial Winners and Losers: Wells Fargo

Financial Winners and Losers: Wells Fargo

Financial Winners & Losers: Citigroup

Financial Winners & Losers: Citigroup

Financial Winners & Losers: Bank of America

Financial Winners & Losers: Bank of America

BofA, Citi Hit by Fitch Downgrades

BofA, Citi Hit by Fitch Downgrades