The Dow Jones industrial average was down 66.20 points to close at 6,852.72 after meandering in a tight range through much of the day. The blue-chip barometer is now up about 61/4 percent on the year, down from a gain of 83/4 percent when it set a record high at 7,067.46 two weeks ago.
Advancers outnumbered decliners by a 5-to-4 margin on the New York Stock Exchange, with 1,427 up, 1,126 down and 785 unchanged. NYSE volume totaled 536.22 million shares vs. 432.68 million yesterday.
The Standard & Poor's 500-stock list fell 4.36 to 790.95, and the NYSE composite index fell 1.66 to 415.68. The Nasdaq composite index rose 6.20 to 1,317.38, and the American Stock Exchange composite index rose 2.22 to 597.04.
Bonds provided some early support for stocks, but then retreated after another surprisingly strong Commerce Department home-sales report for January that fueled worries the Federal Reserve will raise interest rates to contain inflation.
Bonds gave up some early gains after the Commerce Department reported that January's unseasonably warm weather in the Northeast and South helped push sales of new homes to a nearly 11-year high. The 8.6 percent increase from December's tally was stronger than predicted by economists.
And in another report suggesting economic growth may be too robust to keep a lid on inflation, a private research group said its index of future business activity rose 0.3 percent in January, beating expectations of about 0.1 percent.
Federal Reserve Chairman Alan Greenspan roiled the markets last week by threatening to raise the central bank's interest rates to contain inflationary pressures, including the unrelenting investor enthusiasm that has repeatedly sent stocks soaring to record highs. The Fed's policymaking committee meets in three weeks.
As bond prices rose before the home-sales report, the yield on the 30-year Treasury bond -- a key determinant of corporate and consumer borrowing costs -- edged down to 6.80 percent from late yesterday's 6.83 percent. But after the report, the long-bond yield rose to 6.86 percent, the highest finish since late January