Stocks logged their worst performance since a 5.3% loss on Jan. 20 as investors dumped stocks after Treasury Secretary Geithner failed to deliver the specifics that investors sought from Treasury's financial rescue plan.

The build up ahead of Treasury's financial rescue plan helped stocks climb more than 4% over the prior three sessions. Financial stocks climbed 11% during that time. Enthusiasm quickly turned to pessimism, though, when Treasury failed to provide clarity on how it will handle the toxic assets that are driving losses and write-downs on bank balance sheets. Recognition that this part of the plan has yet to be finalized creates an impression that Geithner still doesn't have a complete solution to the situation.

Still, Geithner did indicate the bank recovery plan will help the flow of credit, strengthen banks, and provide aid for homeowners and small businesses. Treasury intends for institutions that need capital to access a new funding mechanism that uses Treasury funds as a bridge to private capital. Meanwhile, Treasury's investments will be placed in a Trust.

Together with the Fed, FDIC, and private sector, Treasury will establish a public-private investment fund to provide capital and financing to help leverage private capital to get private markets working. There is a range of different structures for this program, but Treasury believes it should ultimately provide up to $1 trillion in financing capacity.

The Federal Reserve Board announced it could expand the Term Asset-Backed Securities Loan Facility (TALF) to encompass other types of newly issued AAA-rated asset-backed securities, such as commercial mortgage-backed securities, and private-label residential mortgage-backed securities. The date that the TALF will begin operations will be announced later this month.

Disappointment in Treasury's plan left market participants disinterested in the Senate's $838 billion economic stimulus bill. The bill was passed midday, but it has been relegated since it aims to drive long-term economic growth, rather than provide a short-term lift.

Federal Reserve Chairman Ben Bernanke's testimony to the Financial Services Committee provided some positive points, but did little to ease selling pressure. He stated extraordinary programs have improved market conditions and eased strains. He also indicated the U.S. remains well capitalized and the Fed will be able to offset any losses through eventual gains on asset sales.

There was little market-moving data beyond the government developments. The only item on the economic calendar was a worse-than-expected December wholesale inventory report. Meanwhile, corporate headlines carried more of the same: job cuts are coming from beleaguered General Motors (GM 2.70, -0.13) and beaten down Swiss financial giant UBS (UBS 11.20, +0.16); UBS also posted a multibillion dollar loss, and; Boeing (BA 40.21, -2.59) and Monsanto (MON 80.85, -2.81) refreshed profit concerns.

Every major sector in the S&P 500 finished substantially lower. Financials led the decline, losing 10.9%. Diversified banks (-14.2%) and regional banks (-17.1%) were primary laggards in the sector. Trading volume was the highest since mid-December.DJ30 -381.99 NASDAQ -66.83 NQ100 -4.1% R2K -4.7% SP400 -4.5% SP500 -42.43 NASDAQ Adv/Vol/Dec 481/2.15 bln/2203 NYSE Adv/Vol/Dec 470/1.76 bln/2621