Wall Street headed lower today as investors digested a jump in weekly first-time jobless claims ahead of Friday’s much-anticipated employment report.

Mr Market may also be spooked by Fed chief Ben Bernanke’s second day on Capitol Hill, where he is testifying about the Fed’s recent bailout of Bear Stearns.

The Dow Jones industrials fell 57.97 points to 12,547.86, with the broader S&P 500 declined 5.54 points to 1,361.99.

Read on at Dow Jones MarketWatch. 

The Fed may have already begun its role as Wall Street ’supercop.’

The Wall Street Journal reports that the Fed has sent agents into major Wall Street investment banks to makes sure of the banks’ financial wellbeing.

“We want to be sure that any lending we do to the investment banks will be done on an appropriately sound basis,” said Fed chief Ben Bernanke.

The Fed has is lending money to investment banks, even though it currently has no statutory regulatory power over them.