The Dow Jones industrial average fell 8.95 to 5,921.67, extending a week-long slide from record levels and its first-ever move above 6,000. Earlier, the blue-chip barometer was off nearly 26 points.
Decliners outnumbered advancers by nearly a 7-to-6 margin on the New York Stock Exchange, with 1,093 up, 1,265 down and 884 unchanged. NYSE volume totaled 394.95 million shares, vs. 405.96 million yesterday.
The Standard & Poor's 500-stock index fell 2.21 to 694.53, and the NYSE's composite index fell 1.00 to 370.35. The Nasdaq composite index fell 1.01 to 1,236.97, and the American Stock Exchange index fell 0.11 to 579.99.
Broader measures also recovered from steeper losses in the morning, but the rebound was cut short by a worsening bond market.
Stocks have struggled this week amid growing caution before the impending release of company earnings reports and new inflation data. With four days of rising interest rates on the bond market, investors have taken profits.
Bonds fell this morning amid indications of strength in September's retail sales and news that first-time claims for jobless benefits fell last week.
As bond prices fell today, the yield on the 30-year Treasury bond - a key determinant of corporate and consumer borrowing costs - rose to 6.87 percent from late Wednesday's 6.83 percent and late Friday's 6.74 percent.