American stocks resumed their summer sell-off after Lehman Brothers Holdings Inc. said rising credit costs may reduce bank profits and Freddie Mac predicted the housing market will keep languishing.

Goldman Sachs Group Inc., Morgan Stanley, and Merrill Lynch & Co., Wall Street’s biggest securities firms, led the Standard & Poor’s 500 Index to its third decline this week. Freddie Mac fell the most in four years after the second-biggest American mortgage finance company said the housing slump cut profit by 45%.

The S&P 500 decreased 6.12, or 0.4%, to 1,457.64. The Dow Jones Industrial Average declined 50.56, or 0.4%, to 13,238.73. The Nasdaq Composite Index rose 2.14, or 0.1%, to 2,565.3, extending its gain after the biggest rally in a year.

Lehman reduced its earnings estimates for investment banks two days after Merrill Lynch analysts slashed their projections. Financial shares in the S&P 500, which comprise about one-fifth of the index’s value, are headed for their worst quarter in five years amid concern that higher borrowing costs spurred by mortgage defaults by the riskiest borrowers will erode earnings.

“We don’t have a perfect idea of how deep or widespread the subprime issue will be,” a manager of $7 billion at Independence Investment LLC in Boston, John Forelli, said. “Investment banks are caught in the crosshairs of this financial crisis.”

In economic data yesterday, the Commerce Department said the American economy expanded in the second quarter at the fastest pace in more than a year as exports surged and business spending accelerated.

Gross domestic product growth may slow for the rest of the year because the cost of borrowing grew this month, economists said. The Fed has said that risks to growth have “increased appreciably.”

Growth was revised up to a 4% annual rate. The median forecast of economists polled by Bloomberg News was 4.1%. The Federal Reserve’s preferred inflation measure, which is tied to consumer spending and strips out food and energy costs, rose at a 1.3% annual rate, the smallest gain in four years.

Investors will look for further clues on the outlook for monetary policy tomorrow when the chairman of the Fed, Ben Bernanke, gives the opening speech at the Kansas City Fed Bank’s annual symposium in Jackson Hole, Wyo.

The S&P 500 climbed 2.2% yesterday after dropping 2.4% the previous day. A back-to-back gain and loss of 2% or more has occurred only 35 times since 1945, according to Bespoke Investment Group LLC.