Stocks Fall as Traders Await Fed's Take on Economy (ext:ABCNews/TheStreet)

Stocks lost ground Tuesday as Wall Street fretted over discouraging bank headlines and the Fed's policy-making meeting. The Dow Jones Industrial Average closed down 96.5 points, or 1.03%, to 9241.45, while the S&P 500 gave up 12.75 points, or 1.3%, to 994.35. The Nasdaq Composite edged down 22.51 points, or 1.1% to 1969.73.

The Federal Open Market Committee began its two-day meeting Tuesday and will release a highly anticipated statement Wednesday afternoon. Investors will be looking for more insight into the Fed's plan to unwind measures taken to heal the financial system, as well as any changes in its view of the recovery.
There were some troubling developments during the day, however. Downbeat comments from analysts about banks weighed on the market. Analyst Richard Bove of Rochdale Securities predicted that bank earnings won't improve for the second half of the year and that many companies will post losses.

Analysts say the market's retreat is a sign of health because the S&P 500 index had jumped 15 percent in just four weeks and 49 percent from a 12-year low in early March.

"We've come a long way fast," Bublitz said.