U.S. stocks fell on Wednesday after a sharp drop in housing sales exacerbated investors' worries about banks and the housing market.

U.S. President Barack Obama's speech on Tuesday night did not impress investors much.

Obama vowed that the United States would emerge from the economic crisis, promising to use "the full force of the federal government" to shore up the banking system, and suggesting that fixing the credit crisis will cost more than the 700 billion U.S. dollars already committed.

As part of the Obama administration's Financial Stability Plan, "stress tests" are ready to be taken on the nation's biggest banks to decide if they need further government aid.

The Treasury Department announced on Wednesday that the new aid will be provided through the government's purchase of preferred shares of the bank stock that are convertible into common shares at a 10 percent discount to their price before Feb. 9.

Sales of existing homes unexpectedly plunged in January to the lowest level in nearly 12 years, adding to the pressure on the market.

The National Association of Realtors reported that sales of existing homes fell 5.3 percent to an annual rate of 4.49 million last month, from 4.74 million in December. It was the weakest showing since July 1997.

The Dow Jones industrial average fell 80.05 points, or 1.09 percent, to 7,270.89. The Standard & Poor's 500 lost 8.25 points, or 1.07 percent, to 764.89. The Nasdaq composite was down 16.40 points, or 1.14 percent, at 1,425.43.

Source: Xinhua