The Dow Jones industrial average closed 35.84 lower at 5,673.83, after recovering from a slide of nearly 65 points about an hour earlier. On Tuesday, the blue-chip barometer lost more than 53 points as investors grew increasingly skeptical about new gains in the market's record-setting advance and started locking in profits.

On Wednesday, decliners led advancers by 1,541 to 852 on the New York Stock Exchange. Volume totaled 346.13 million shares vs. 338.25 million in the previous session.

Broad-market indexes also gave back more of their recent gains after holding their ground for much of the session.

The NYSE composite fell 2.08 to 358.44 and the S&P 500-stock index was off 4.30 at 667.93.

The Nasdaq composite fell 10.97 to 1,225.33, and the American Stock Exchange's market value index slipped 3.50 to 607.27.

"We're seeing a follow-through on (Tuesday's) weakness, which was a reaction to a rather strong move over the last few weeks," said Eric Miller, chief strategist at Donaldson, Lufkin & Jenrette Securities in San Francisco.

Bonds dropped on Wednesday afternoon after Federal Reserve Board Governor Susan Phillips, speaking at a conference, said the economy was doing very well but that there were some signs of wage inflation, analysts said.

Afterward, the yield on 30-year Treasuries rose over 6.9 percent, with investors worrying that the Fed would raise interest rates in July to fight inflation by slowing consumer spending.