(By Salman - iStockAnalyst Writer)

US stocks finished mixed on Wednesday as dismal economic data and worries over the health of banking system offset optimism over Obama’s housing plan.

The Dow Jones Industrial Average rose 3.03 points or 0.04% to finish at 7,555.63. The S&P 500 slipped 0.75 points or 0.10% to 788.42. The Nasdaq Composite fell 2.69 points or 0.18% to 1,467.97.

A Department of Commerce release on Wednesday showed housing starts fell a record 16.8% in January to seasonally adjusted annual rate of 466,000. Economists had projected Housing Starts to decline to an annual rate of 529,000.

Building Permits dropped 4.8% to annual rate of 521,000. Economists had forecast building permits to decline to 525,000 in January.

Early on Wednesday, U.S. President Barack Obama unveiled a $275 billion mortgage rescue plan in order to stem a wave of foreclosures.

US Federal Reserve on Wednesday said that U.S. industrial production declined 1.8% in January, worse than the consensus estimates of 1.5%. Capacity utilization fell to a 26 year low of 72% in January from 73.3% in the previous month.

Release of the minutes from the FOMC's meeting on Jan. 28 added to the gloom. According to the minutes, the policymakers at US Federal Reserve forecast that the economy is expected to contract between 1.3% and 0.5% in 2009 and then grow about 2.5% to 3.3% next year. The participants projected that the unemployment rate would increase to 8.5% to 8.8% in 2009 before gradually declining over the next two years.  

Financial stocks were hammered. Bank of America (NYSE: BAC) sank 33 cents or 6.73% to $4.57. Citigroup Inc. (NYSE: C) tumbled 15 cents or 4.90% to $2.91. Wells Fargo & Company (NYSE: WFC) plunged 64 cents or 4.67% to $13.05.

General Motors (NYSE: GM) slumped 12 cents or 5.50% to $2.06. Late on Tuesday, General Motors Corp. and Chrysler LLC, submitted requests for $22 billion in additional loans to the U.S. Treasury in order to avoid bankruptcy. The struggling automakers also said that they have reached an agreement with United Auto Workers union to cut labor costs.

Alcoa Inc. (NYSE: AA) lost 26 cents or 3.85% to end at $6.49.

Equipment maker Caterpillar (NYSE: CAT) retreated 54 cents or 1.86% to $28.44.
 
Shares of retail giant Wal-Mart Stores Inc. (NYSE: WMT) rose $1.76 or 3.65% to $50.

Early on Wednesday, Comcast Corp. (NASDAQ: CMCSA) announced that its fourth-quarter fell 32% to $412 million, or 14 cents a share from $602 million, or 20 cents a share in the same period, a year ago. On an adjusted basis, the company earned $790 million, or 27 cents a share. Revenue rose 9% $8.77 billion. Shares of the company plummeted 53 cents or 4.11% to $12.36.

Deere Co. (NYSE: DE) dropped $1.26 or 3.76% to $32.23 after it said its fiscal first-quarter earnings slipped to $203.9 million, or 48 cents a share, from $369.1 million, or 83 cents a share in the prior year quarter. Revenue dropped 1% to $5.1 billion from $5.2 billion.

Goodyear Tire & Rubber Co. (NYSE: GT) swung to a fourth quarter loss of $330 million, $1.37 a share compared to profit of $52 million, or 23 cents a share in the comparable period, a year ago. Revenue slumped 21% to $4.1 billion from $5.2 billion. The biggest U.S. tire maker also announced that it plans to cut 5,000 jobs or nearly 7% of its total workforce. Goodyear Tire & Rubber added 36 cents or 5.98% to end at $6.38 on Wednesday.

European stocks settled with losses. The U.K. FTSE retreated 27.30 points or 0.68% to close at 4,006.83. The German DAX and French CAC slumped 0.28% and 0.03% respectively.

Asian stocks finished mixed. The Nikkei 225 fell 111.07 points or 1.45% to 7,534.44. The Hang Seng index of Hong Kong rose 70.60 points or 0.55% to 13,016.

NYMEX crude oil for March delivery declined 39 cents, or 1.1% to $34.54 a barrel.

Disclosure: Author does not own any of the stocks discussed here.