"We're just coming into earnings season now," said Will Braman, chief investment officer, John Hancock Funds. "It's time for 'show us the money,' and investors' expectations are not very high. There is a lot of skepticism. The numbers we get are going to be pawed over and looked at very critically."

The Dow Jones industrial average closed down 178.81, or 1.9 percent, to 9,096.09, according to preliminary calculations. It was the average's second triple-digit decline this week, for a total loss of 283.41 that wiped out much of Friday's 324-point rebound.

Broader stock gauges also retreated. The Standard & Poor's 500 index fell 24.15, or 2.0 percent, to 952.83, and the Nasdaq composite index lost 24.47, or 1.7 percent, to 1,381.14. This week alone, the Nasdaq has tumbled 4.6 percent.

Bush called for longer prison sentences for executives who defraud the public and stronger powers for the Securities and Exchange Commission. He also wants to put together a task force to pursue and prosecute corporate fraud.

His remarks came in response to scandals at companies ranging from Enron to WorldCom that have cost investors billions of dollars. Investor confidence, already fragile because of the economic slump, has further declined amid the reports of accounting irregularities, contributing to the stock market's malaise.

Bush's comments failed to convince disillusioned investors that better days were ahead, however ­ perhaps because it's too soon to tell whether his proposals will be implemented.

"I think actions speak louder than words. If somebody goes to jail, maybe people will take corporate America a little more seriously," said Jack Francis, managing director and head of Nasdaq trading at UBS Warburg.

Analysts also said investors were reluctant to make any big commitments without more earnings information. Second-quarter reports are due out later this month, and, after two years of losses, most on Wall Street are unwilling to make many bets.

"When we start to get some earnings, that should give the market a reason to move," said Bill Meade, managing director, RBC Capital Markets.

Pharmaceutical company Wyeth plummeted $11.94, or 24.3 percent, to $37.70 on word that a government study had found the long-term use of hormone therapy by women significantly increased the risk of breast cancer, strokes and heart attacks. Wyeth makes Prempro and other estrogen supplements used in hormone therapy.

The selling spread to other drug companies, including Merck, which had fallen yesterday on concerns about its accounting methods. Merck lost $2.06 to $45.75.

In the tech sector, semiconductor stocks pulled back after Merrill Lynch and Deutsche Bank reduced their forecasts for many companies in the group, citing weak order prospects. Applied Materials dropped $1.28 to $17.72, while Texas Instruments lost 85 cents to $23.30. Bellwether Intel slid 54 cents to $17.96.

Declining issues led advancers 3 to 2 on the New York Stock Exchange. Volume came to 1.34 billion shares, compared with 1.16 billion yesterday. Decliners led advancers 5 to 4 on the Nasdaq Stock Market.

The Russell 2000 index fell 4.36 to 429.25.

Overseas, Japan's Nikkei stock average rose 1.8 percent. In Europe, Germany's DAX index lost 1.6 percent, Britain's FTSE 100 was down 1.3 percent, and France's CAC-40 was down 1.0 percent.