Optimism has turned to realism on Wall Street.

US stocks slumped today following disappointing quarterly earnings and news that mortage lender Washington Mutual needed a bigger cash injection than expected. WaMu today drew $7 billion in capital, $2 billion more that the amount originally circulated.

News that existing home sales dropped in February also weighed on investor sentiment.

The Dow Jones industrials were recently down 32.73 points to 12,579.78.

Read on at Dow Jones MarketWatch.

“Seems like only Thursday Ben Bernanke testified before Congress he thought Bear Stearns was the worst,” says Addison Wiggan, “and that the worst is behind us.”

“Oh yeah, it was only Thursday. Granted, “The government was not directly involved in forging a deal as in the recent purchase of Bear Stearns,” reports The Wall Street Journal, but still…”

“There’s nothing out there that could fuel a market rally,” wrote Charles Delvalle ahead of the bell this morning. “And in my opinion, a recession hasn’t even been fully priced in yet.”