But, he said, "there will be a point in time where the euphoria of the bailout plan begins to wear off and the market begins to face reality. And that reality is likely to be a sour earnings season, and that the economy is in recession."

According to preliminary calculations, the Dow fell 76.62, or 0.82 percent, to 9,310.99.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 5.34, or 0.53 percent, to 998.01, and the Nasdaq composite index fell 65.24, or 3.54 percent, to 1,779.01.

Though the major indexes showed losses, advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where volume came to 1.88 billion shares.

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said investors pleased about the government's bank plan gravitated toward industrial companies, seeing them as more likely to benefit from a revived credit market than technology companies. That helped send the Nasdaq lower.

"People are thinking more of the blue chips are going to respond," he said.

Light, sweet crude fell $2.56 to settle at $78.63 per barrel on the New York Mercantile Exchange.

The dollar was mixed against other major currencies, while gold prices declined.

The Dow remains 34.3 percent below its Oct. 9, 2007 record close of 14,164.53, and could fluctuate around these levels as investors await signs of stabilization in the housing and job markets.

Cardillo said he believes the worst lows are behind the stock market, but other analysts have shied away from saying Wall Street had reached a bottom. The Dow has not yet fallen below its low during the last bear market, the closing level of 7,286.27 on Oct. 9, 2002.

Investors have been trying to regain their footing after a gruesome week that obliterated about $2.4 trillion in shareholder wealth. The Dow came off an eight-day losing streak that amassed point losses of just under 2,400, or 22.1 percent, bringing the blue-chip index to its lowest level since April 2003. That 18.2 percent weekly plunge in the Dow was the worst in the index's 112-year history.

Following the Columbus Day holiday, the U.S. government bond markets reopened Tuesday and indicated that investors' desire for safe assets remains strong though overall demand appeared to ease. The three-month Treasury bill's yield rose to 0.27 percent from 0.21 percent late Friday, and the 10-year note's yield rose to 4.07 percent from 3.86 percent.

Banks appear to be growing somewhat more willing to lend to one another. The London interbank offered rate, or Libor, for three-month dollar loans fell to 4.64 percent from 4.75 percent. Libor is important because many consumer loans, including about half of all adjustable-rate mortgages, are tied to it.