Wall Street slips; Dow ends 148 pts down on criticism about govt’s bad bank plan & Asia trading mixed; Hang Seng down 2.2%

In US markets, stocks extended their losses for the second straight session capping the worst January for markets. Stocks gained initially after investors reacted positively to a better-than-feared GDP report.

However, a closer look at the data revealed otherwise. According to the latest data, the US Economy contracted at an annualized rate of 3.8% during the fourth quarter, marking the steepest drop in economic activity since 1982. The decline was less severe than the 5.5% drop that was expected.

Without a clear, effective remedy for banks at hand, financial stocks remain under pressure. The sector closed 2.5% lower with particular weakness in regional banks and diversified financial services companies.

The Dow plunged 148.15 points, or 1.82%, to 8,000.86. The S&P 500 slipped 19.26 points, or 2.28% to 825.88, and the Nasdaq composite index declined 31.42 points, or 2.08%, to 1,476.42.