Bernanke's speech last night in New York elevated concerns that the summer's credit tightness might persist into the winter — a sobering thought for investors, who are sifting through mixed third-quarter earnings and watching energy costs rise.

"First of all, the worry is we're getting more bad news on housing. No. 2 is higher oil prices. That's a pretty bad combination," said Hugh Johnson, chief investment officer of Johnson Illington Advisors.

Crude oil prices spiked to another record above $88, and a National Association of Home Builders' index that tracks developers' expectations of future home sales fell for the eighth consecutive month to the lowest point since January 1985. Also today, Treasury Secretary Henry Paulson echoed Bernanke's concerns, saying the housing market is a significant risk to the economy.

The ensuing uncertainty on Wall Street about the economic outlook "comes at a time when earnings results are not particularly exciting — in fact, are dismal," Johnson said.

A day after Citigroup Inc. reported a steep third-quarter profit decline and announced plans with a consortium of banks to set up a fund to help bail out the credit markets, two more banks released disappointing results.

Wells Fargo & Co. shares fell 4 percent after the bank said third-quarter earnings increased by less than analysts anticipated and that it boosted loan loss reserves in preparation for more problems in consumer credit. KeyCorp shares declined nearly 6 percent after the Midwest regional bank posted a 33 percent drop in third-quarter profit.

According to preliminary calculations, the Dow Jones industrial average fell 71.86, or 0.51 percent, to 13,912.94, after falling more than 100 points earlier in the session.

Broader indicators also declined. The Standard & Poor's 500 index slid 10.18, or 0.66 percent, to 1,538.53, and the Nasdaq composite index dipped 16.14, or 0.58 percent, to 2,763.91.

Bond prices rose as investors pulled money out of stocks. The yield on the 10-year Treasury note, which moves inversely to the price, fell to 4.66 percent from 4.68 percent at yesterday's close.

The dollar rose against most currencies. Gold also rose.

Yesterday, the Dow and the S&P posted their biggest point drops in five weeks; just last week, the two indexes had touched record highs.

"The relief rally that we've enjoyed since Aug. 16, the day before the Fed cut the discount rate, has been an impressive one. And it will probably still push stock prices higher the rest of the year," said Edward Yardeni, an economist who runs Yardeni Research in Great Neck, N.Y.

But, he added, "the first batch of earnings news for the third quarter gives some reason for concern, particularly for the banks, who are probably going to continue to have problems with their own portfolios."

Bernanke said last night the deepening housing slump will probably keep dragging on economic growth, but he again pledged to "act as needed" to help financial markets that seized up this summer. He also said inflation remains in check — which could convince policymakers to cut interest rates for the second month in a row at their Oct. 30-31 meeting.

But while core inflation — which excludes volatile food and energy prices — is mild, oil prices are pushing further into uncharted territory on speculation about supply disruptions.

Crude futures rose $1.48 to a record close of $87.61 a barrel on the New York Mercantile Exchange, after briefly surpassing $88.

Declining issues outnumbered advancers by about 8 to 3 on the New York Stock Exchange. Volume came to 1.29 million shares.

Most financial and housing-related stocks fell, as did retailers.

A couple bright spots in the financial sector were State Street Corp., a trust bank that posted a profit rise of 29 percent on strong revenue from servicing fees and trading services, and Bear Stearns Cos. A bank owned by the investment arm of China's cabinet is planning a bid for a stake in the brokerage.

State Street rose $5.75, or 8.3 percent, to $74.68.

Bear Stearns rose $2.36, or 2 percent, to $123.05.