Wall Street sank for a second straight session Tuesday after Federal Reserve Chairman Ben Bernanke said the slumping housing market remains a “significant drag” on the economy.

Bernanke’s speech Monday night in New York elevated concerns that the summer’s credit tightness might persist into the winter – a sobering thought for investors, who are sifting through mixed third-quarter earnings and watching energy costs rise.

“First of all, the worry is we’re getting more bad news on housing. No. 2 is higher oil prices. That’s a pretty bad combination,” said Hugh Johnson, chief investment officer of Johnson Illington Advisors.

Crude oil prices spiked to another record above $88, and a National Association of Home Builders’ index that tracks developers’ expectations of future home sales fell for the eighth consecutive month to the lowest point since January 1985. Also Tuesday, Treasury Secretary Henry Paulson echoed Bernanke’s concerns, saying housing is a significant risk to the economy.

The uncertainty on Wall Street about the economic outlook “comes at a time when earnings results are not particularly exciting – in fact, are dismal,” Johnson said.

A day after Citigroup Inc. reported a steep third-quarter profit decline and announced plans with other banks to set up a fund to bail out the credit markets, some more banks released disappointing results. [MORE]