U.S. stocks fall as beleaguered banks tumble again

Stocks fell Tuesday as shares of beleaguered banks tumbled again and worries about the economy worsened.

The rising fear sent yields sinking in the bond market, while Wall Street waits for the Federal Reserve's latest move on interest rates and Washington edges closer to what would be a catastrophic default on U.S. government debt.

The S&P 500 fell 52 points, or 1.2%, closing at 4,117. The Dow Jones Industrial Average was down 398 points, or 1.2%, at 33,654, after being down as many as 615 points earlier in the day. The Nasdaq composite tumbled 1%.