So far this week on Wall Street has been another case of one step forward, two steps back. 

Financial stocks, especially Fannie Mac and Freddie Mae, led the way down on Wednesday as all three major indexes officially entered bear markets for the first time. 

Today's Market 

The Dow Jones Industrial Average slid 236.77 points, or 2.08% to 11147.44, the Standard & Poor’s 500 index lost 29.01 points, or 2.28%, to 1244.69 and the Nasdaq Composite Index tumbled 59.55 points, or 2.60%, to 2234.89. The consumer-friendly FOX 50 fell 21.20 points, or 2.35% to 881.68.

Wednesday's ugly afternoon erased all of a triple-digit gain (and then some) from the day before. It was a major setback considering on Tuesday the stock market enjoyed its best day in nearly a month. 

“It's like water torture. There’s just no place to hide," Ted Weisberg of Seaport Securities told FOX Business, lamenting the lack of a follow through from the day before. 

It was also a negative development that the S&P joined its sister indexes, the Dow and the Nasdaq Composite, in bear market territory for the first time on Wednesday. The status indicates that they have all declined at least 20% from 52-week highs. 

Bank of America (BAC) led the decliners on the Dow on Wednesday, erasing almost all of its gains from a day ago. Several of the other major losers on the index were also financial names, with Citigroup (C), American Express (AXP) and AIG (AIG) all closing significantly lower. Even Boeing (BA) ended the day in the red despite being given another shot at the $35 billion Air Force tanker deal it had disputed.

“The financials are just bringing this whole market down. It’s a sad day here on the New York Stock Exchange," Alan Valdes of Hilliard Lyons told FOX Business. 

Financial stocks closed more than 5% in the red as a group, limiting the gains they made a day ago. Leading the way down were Fannie Mae (FNM) and Freddie Mac (FRE), which are the two largest providers of U.S. mortgages. The government sponsored enterprises have been under major pressure in recent days from fears they will need to raise more capital. Freddie lost almost one quarter of its market value on Wednesday.

Also, Fitch Ratings said it may need to cut Merrill Lynch’s (MER) credit ratings, saying the firm’s losses in fixed-income, commodities and currency continue to overwhelm its income from other segments. Shares of Merrill tumbled almost 10% on the news. 

The equities selloff came despite oil prices ending flat, failing to rally for the third straight day. Oil closed up 1 cent at $136.05 a barrel in the face of several bullish factors. 

The energy market could have pushed the price of oil higher after the government reported a much larger-than-expected 5.9 million barrel decline in oil stockpiles. Economists surveyed by Dow Jones had only been looking for a 1.4 million barrel decline. However, the report did show gasoline and distillate stockpiles increased. 

Oil closed in the red despite reports that Iran, one of the largest oil producers in the world, test-fired nine long and medium range missiles Wednesday during war exercises. Wall Street has been worried that increasing escalation between Iran and the U.S. and Israel will lead to a military strike and supply reductions.  

Tech stocks took a hit on Wednesday, with Cisco (CSCO) tumbling 5%. The stock declined on a pair of negative analyst notes and a Reuters interview from CEO John Chambers, in which he told the news agency many of his customers don't expect the economy to recover until later this year. Chambers also commented on the company's CEO position, saying he hasn't picked a successor and that the next CEO will likely be a leader of a council rather than a "command and control" leader.

Corporate Movers

Boeing (BA) ended lower even after the Pentagon detailed plans to rebid the $35 billion contract tanker originally awarded to Northrop Grumman (NOC) and its European partner EADS. Defense Secretary Robert Gates said the Pentagon will take over the process, which he expects to be completed by the end of the year. Boeing appealed the February decision earlier this year and the Government Accountability Office found flaws in the bidding process. The new decision doesn't award Boeing the contract but does give the company a shot at capturing it. 

Merrill Lynch's (MER) 20% stake in Bloomberg LP could fetch $4.5 billion from a blind trust run by Mayor Bloomberg, the New York Post reported. Merrill could decide to unload its stake in the financial data company in an effort to firm up its balance sheet. The newspaper also reported that Merrill's 49% stake in asset-management firm BlackRock (BLK) could be sold to several different parties, including sovereign wealth funds and private-equity firms. 

Wachovia (WB) was reportedly upgraded to "neutral" from "underperform" by Merrill Lynch. Pointing to a possible sale, the firm said Wachovia's stock could rise significantly, according to Thomson Reuters. Merrill also reportedly cited improving credit conditions but warned Wachovia's stock could be pushed lower by more credit losses, weak earnings, capital raising, a possible dividend cut and other charges.

Alcoa (AA) failed to rally even after the aluminum titan beat the Street in its second-quarter earnings and revenue. Alcoa's results represented a decline from a year ago as the company deals with higher costs and production issues. On Wednesday Alcoa's price target was trimmed to $39 from $43 by Merrill Lynch, according to Thomson Reuters. 

MBIA (MBI) closed sharply lower, erasing earlier gains. The stock jumped in morning trading after the bond insurer released a statement saying it received a green light from the New York State Insurance Department for a July 15 interest payment on its surplus notes. The news lifted fellow bond insurer Ambac Financial (ABK) even further, soaring more than 25%. 

Ruby Tuesday (RT) is expected to post fiscal fourth-quarter earnings of 20 cents per share on $341.75 million in sales when it reports its results after the closing bell on Wednesday. 

World Markets

The Dow Jones Euro Stoxx 50 Index, a gauge of the 50 biggest companies in Europe, rose 54.88 points, or 1.67%, to 3342.48. The FTSE 100, London's benchmark index, gained 89.10 points, or 1.64%, to 5529.60.

On the continent, Paris's CAC 40 Index picked up 64.05 points, or 1.50%, to 4339.66 while Germany's DAX rose 82.05 points, or 1.30%, to 6386.46.

In Asia, Japan's benchmark Nikkei 225 Index added 19.03 points, or 0.15%, to 13052.13. Hong Kong's Hang Seng soared 585.00 points, or 2.76%, to 21805.81.