NEW YORK (CNNMoney.com) -- Stocks slipped Tuesday as recession fears trumped a new government and mortgage industry plan to help troubled homeowners.

The Dow Jones industrial average (INDU) lost 176 points, or 2%. The Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) both shed 2.2%.
Stocks slumped through the early afternoon on recession fears, then recovered most of those losses after the government's mortgage modification plan was unveiled. But the recovery attempt petered out by the close.
""Between the automakers and the financials, bad news continues to dominate,"" said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
He said good news doesn't seem to stick, with traders using any upswing as a chance to book profits.
After a weeklong sell-off, stocks sit near bear-market lows hit in late October.
""At some point the selling will begin to exhaust itself,"" said Larry Glazer, managing director of Mayflower Advisors.
But he said it will take time for investors to move from fear, which is causing them to bail out, to the confidence that enables them to realize that 1% in a money market fund is not a good deal. ""Today they're paying a premium for safety,"" he said. ""I think as we look past the first of the year, and the dust starts to settle, investors are going to say, 'OK, we've put money aside, now what?'""
Stocks slumped Monday as relief about AIG's loan restructuring vied with Circuit City's bankruptcy and more weakness for the automakers. Corporate news dominated Tuesday, with government offices and Treasury markets closed for Veterans Day.
In the afternoon, the Bush administration released its plan to help borrowers. The current plan focuses on Fannie Mae and Freddie Mac - which own or back a combined $5 trillion in mortgages.
However, the plan does not provide any direct financial help from the U.S. government.