The Dow Jones industrial average fell 30.29 to 5,667.19 after retreating from a gain of more than 25 points at its opening.
Decliners topped advancers by 1,392 to 1,023 on the New York Stock Exchange, NYSE volume totaled 463.13 million shares vs. 375.38 million in the previous session.
Broad-market indexes also turned lower after a strong opening.
The NYSE composite index fell 2.28 to 361.10 and the S&P 500 list was off 5.41 at 673.03.
The Nasdaq composite index dropped 14.48 to 1,234.67 and the American Stock Exchange's market value index fell 5.43 to 602.84.
Stocks initially took their cue from bonds, which leaped higher in early trading, sending the yield on the 30-year Treasury bond under 6.9 percent. On Wednesday, stocks pushed higher on a late spurt in bonds spurred by falling commodities prices.
But the stock market's reaction to Thursday's improvement in interest rates was fleeting with investors remaining skittish before Friday's report on May employment, which may provide crucial clues on inflation.
"I'm a little surprised that the overall market is not acting better with bonds," said Robert Streed, senior investment adviser at Northern Trust in Chicago.
"But the stock market has done surprisingly well in the past few months in the face of a bad bond market," he noted.