A host of inancial stocks, which had helped boost stocks from their March lows, were downgraded today by Standard & Poor's today.

S&P lowered the credit ratings on 22 U.S. banks, including Wells Fargo (WFC), Keycorp (KEY), news, msgs) and PNC Financial Services Group (PNC), news, msgs).

The big downgrade was a big reason why financial stocks were so weak today.

Update: 5:20 p.m. ET.

President Barack Obama gave details of his plans to overhaul financial market regulations this afternoon, in what he called "a transformation on a scale not seen since the reforms that followed the Great Depression."

Financial stocks were lower as investors worked through the proposal, but Standard & Poor's downgraded 22 banks because the rating agency was worried about how the regulatory plan would affect the banks' profits.

The Select Sector SPDR-Financial exchange-traded fund (XLF), which tracks the financial sector of the Standard & Poor's 500 Index ($INX), was off 2.9% to $11.61. The KBW Bank Index ($BKX) fell 3.3% to 35.52.  

The president said he is seeking "a careful balance" in his efforts to regulate the markets.

Update: 5 p.m. ET.

Adobe Systems (ADBE, news, msgs) said late Tuesday that it earned $126 million, or 24 cents per share, in its fiscal second quarter, a 41% drop from the $215 million, or 40 cents per share, it earned in the same period last year.

Adobe was hit by declining demand for its graphic-design software programs as advertisers cut back on spending because of the recession.

The Dow Jones industrials ($INDU) fell more than 100 points for a second straight day as stocks were dragged lower by sagging retail and metals stocks.

Financial stocks were also among the laggards because of concerns about how the Obama administration's proposals to streamline and tighten regulation of the financial services industry would affect those companies' profits. The plan is due Wednesday.

The Dow was down 107 points, or 1.3%, to 8,505. The Standard & Poor's 500 Index ($INX) was off 12 points, or 1.3%, to 912, and the Nasdaq Composite Index ($COMPX) fell 20 points, or 1.1%, to 1,796.

The blue-chip index has fallen 3.4% this week after finishing Friday in the black for the year for the first time since Jan. 6.

The market's decline helped interest rates move lower. The 10-year Treasury yield fell to 3.67% from 3.71% on Monday and from 4% during the day on Thursday. Mortgage rates, however, were still above 5.5% today, Bankrate.com said.

Rates had jumped as an argument broke out among traders last week -- many with big bucks behind them -- over whether inflation was about to erupt.

In addition to the rate drop, there was this bit of good news in the Dow's second 100-point decline in two days:

The S&P 500 bounced off 912, its 200-day moving average, a signal that some investors don't see the market seriously tanking.

Today's decline was set off by disappointing results from electronics retailer Best Buy (BBY, news, msgs). Same-store sales, a key financial measure, fell more than expected.

At the same time, a Commerce Department report on building permits and housing starts was better than expected. But industrial production fell 1.1%, a seventh straightly monthly loss, the Federal Reserve said.

• Is housing getting ready for a rebound?

A big issue today was whether consumers, who normally generate roughly 70% of U.S. economic activity, are going to pump up their spending any time soon. The betting today was probably not.

The economy may be starting to bottom, but a big-time recovery has not yet begun. As evidence, MySpace, the social-networking site, said it was laying off 30% of its work force.

Retail stocks generally were lower, following Best Buy's lead.

• Get free, real-time stock quotes on MSN Money

Wal-Mart Stores (WMT, news, msgs) was off 0.4% to $48.25. Target (TGT, news, msgs) fell 3.7% to $38.62, and Nordstrom (JWN, news, msgs) dropped 6.8% to $18.99.

But, as with Monday's sell-off that saw the Dow fall 187 points, volume was light. Trading on the floor of the New York Stock Exchange hit 1.17 billion shares, roughly a third less than normal.

Bank stocks were generally lower today, ahead of a speech by President Barack Obama Wednesday that will offer details on how to shore up regulation of the nation's financial regulatory structure.

The S&P 500 financial sector exchange-traded fund -- technically the Select Sector SPDR-Financial (XLF) ETF -- fell 1.7% to $11.96. Bank of America (BAC) was down 4.5% to $12.73. JPMorgan Chase (JPM) dropped 1.5% to $33.50.

Maybe, and only just maybe, a government report said today, housing is putting in a bottom.

The Commerce Department said today housing starts jumped 17.2% in May to a seasonally adjusted annual rate of 532,000, after tumbling 12.9% in April. Economists had expected a 5.9% gain.

The increase was helped by a 62% gain in new construction of apartments. Multifamily starts are a small component of the overall housing picture, and the month-to-month historically has been quite volatile.

Starts of single-family rose 7.5% to a 401,000 rate.

A report on wholesale prices showed that prices increased 0.2% in May, the Labor Department reported today.

Economists had been looking for a 0.6% gain last month after a 0.3% increase in April. The Producer Price Index fell 0.5% from the same time last year, the biggest annual decline since April 1949.

The core PPI, which excludes volatile food and energy prices, fell 0.1% last month. The consensus estimate was for a 0.1% gain.

The restructuring continues at MySpace, whose staff will get cut by almost 30%, the News Corp. (NWSA, news, msgs) division announced today.

MySpace's staff is "bloated" considering the "realities of today's marketplace," which prevents it from operating with efficiency and innovation, MySpace said.