US stocks fell slightly on Tuesday amid reports that the government will require banks to raise more capital in the ongoing recession.

The results of the government's so-called stress tests, which are designed to evaluate the health of the country's 19 largest banks, are due to be released Thursday.

The Wall Street Journal reported that 10 of the 19 banks will likely be told they need more capital to survive the economic downturn.

Federal Reserve Chairman Ben Bernanke on Tuesday said the US economy continues to show signs of stabilizing and may be growing again by the end of the year, but recovery could be derailed if the fragile financial system plunges back into crisis.

A drop in oil prices led to a mild sell-off of energy shares. Crude oil dropped 1.2 per cent to 53.84 dollars per barrel in New York, the first decline in five days.

The blue-chip Dow Jones Industrial Average lost 16.09 points, or 0.19 per cent, to 8,410.65. The broader Standard & Poor's 500 Index was down 3.44 points, or 0.38 per cent, to 903.8. The technology- heavy Nasdaq Composite Index dropped 9.44 points, or 0.54 per cent, to 1,754.12.

The US currency climbed against the euro to 74.98 euro cents from 74.58 euro cents on Monday. The dollar edged up against the Japanese currency to 98.92 yen from 98.76 yen. (DPA)