The markets continued to be plagued Thursday by uncertainty in bank stocks.

The Dow Jones Industrial Average fell 89.68, or 1.19%, to 7,465.95, while the S&P 500 lost 9.48, or 1.2%, to 778.94. The Nasdaq fell 25.15, or 1.7%, to 1,442.82.

Dylan Ratigan, the moderator of the CNBC's "Fast Money" TV show, said the Dow, which has fallen to its lowest level since October 2002, continues to plunge as the market searches for answers from the banks.

"The banks, the banks, the banks. It's like Groundhog Day here," he said in exasperation.

Pete Najarian said the outlook looks bleak, with noted banking analyst Meredith Whitney saying the banks are heading down even further.

Tim Seymour said the insurers are taking in on the chin as well, including Prudential Financial ( PRU), which no longer will have access to commercial paper.

Joe Terranova attributed the weakness of the stocks to weak consumer spending and the continued decline in home prices.

From a valuation standpoint, Terranova said these stocks have fallen to a level that's unimaginable. He noted, for example, US Bancorp ( USB), which has fallen to $10.

Karen Finerman noted that investors in Bank of America ( BAC) are better off in the preferred stock than in the common equity.

Najarian said there are still opportunities in the troubled financial sector, noting in particular Visa ( V) and Northern Trust ( NTRS).

Ratigan shifted the discussion to oil, which jumped 14% on Thursday. Terranova said oil prices appear to be stabilizing at $35 to $40. "That doesn't mean it will run up to $60, but it does mean the short trade is over," he said.

Seymour added the outlook is bullish, with oil one year out being significantly higher than current levels.

The technology stocks, which had been doing well in the beginning of the year, has hit a rough patch, most recently with HP ( HPQ) getting hammered today after posting a 13% decline in earnings and a rough outlook for 2009.

Najarian said there was some concern about Apple ( AAPL) and a report that its PC sales in January were off 6%.

Finerman said she wasn't clear what sort of business model Dell ( DELL) has, though she found the stock extremely tempting at $8.

Seymour said he is starting to see a slow buildup in chip inventory and the beginning of demand. That prompted a look of disbelief from Najarian who said the competition in the semiconductor space will just cannibalize themselves. He noted even the CEO of Applied Materials ( AMAT) was cautious about his company's exposure to sun fabrication, which theoretically should benefit from Obama's stimulus plan.

"He (the CEO) said he wasn't sure sun fab will be able to produce for us," said Najarian.

Ratigan brought on Doug Kass, a columnist for TheStreet.com, who offered some hope in a pessimistic market. Kass said he is seeing signs that the bear market might be coming to an end in early 2010.

Kass noted several events could help turn the corner for the markets, including the magnitude of the monetary and fiscal stimulus, consumer tax cuts, lower commodity rates for corporations, lower cost of credit, and improving investment liquidity.

He said investors should tread carefully in what he termed a two-sided market, with shorts and plenty of longs emerging.

Kass sees China as an opportunity and likes Transocean ( RIG) and Freeport McMoRan ( FCX).

Ratigan invited Barton Biggs, managing partner for Traxis Partners, to discuss the banking crisis in Eastern Europe. Contrary to the gloomy reports about the banking crisis in that region, Biggs said he believes the IMF, World Bank and Germany have the resources to deal with the problem.

He said he would be very nervous being short on the Eastern Europe countries or the euro. He also said that experts say the worst is over for Russia.

Asked about U.S. equities and banks, he said U.S. equities are testing the November lows. He said he's optimistic that there will be a "big rally" at some point, though not in the 15%-to-20% range.

He said Treasury Secretary Timothy Geithner is going about the bank rescue is the "right" way. He expects three to four banks to fail and be nationalized, adding a similar fate probably awaits 100 small regional banks.

Margaret Brennan, a CNBC reporter at New York Fashion Week, told the panel that high-end stores in the U.S. are not buying much now. She also expects American designers, impacted by the slump in retail sales, will soon be targeting their wares to the Wal-Marts and Targets of the world in order to keep their brands alive.

In a segment that looks for alternatives to stocks, Finerman said she liked short-term corporate bonds for several reasons, including the potential "enormous" amount of issuance, higher rates and possible deterioration of U.S. credit.