Bad loans and even weaker bank earnings dragged stocks farther away from their six-week winning streak and toward a possible summer slump.

Bank of America’s shaky earnings report yesterday rattled investors in Europe and New York, and were poised to affect Asian trading today.

“We had started to believe that there was light at the end of the credit crisis tunnel, and a lot of the wind got taken out of the sails,” said Hugh Johnson, chief investment officer of Johnson Illington Advisors.

The Dow Jones industrial average retreated back into the 7,000-point range after falling 3.56 percent, or 289.60, to 7,841.73. The Standard & Poor’s 500 dropped 4.28 percent to 832.39, off 37.21 points. The Nasdaq lost 3.88 percent to 1,608.21, down 64.86 points.

“We’ve had a decent run in the past few weeks.” said Wachovia economic analyst Tim Quinlan.

Among banking stocks, Bank of America dived 24 percent to $8.02, while Citigroup dropped 19.5 percent to $2.94 on growing concerns about widening losses from consumer credit and commercial loans.