NEW YORK » Wall Street began a holiday-shortened week with a moderate pullback yesterday as investors recoiled at bleak news from Toyota Motor Corp. and drugstore operator Walgreen Co.

Walgreen's profit fell 10 percent in its fiscal first quarter, due mostly to the costs of opening more than 200 new stores, so the company said it will slow down its expansion.

Toyota, meanwhile, slashed its earnings forecast for a second time, warning that it now expects to post an operating loss for the fiscal year through March.

It would be the Japanese automaker's first such loss since it began reporting results in 1941, and underscores the challenges facing car companies. Toyota's American rivals, General Motors Corp. and Chrysler LLC, received a $17.4 billion lifeline from the federal government last Friday to stave off bankruptcy.

Today, the U.S. Commerce Department reports on last month's new home sales, while the National Association of Realtors reports on existing home sales. Economists forecast that both will show declines.

Analysts pointed out, though, that trading volumes were very low yesterday, and likely to stay that way throughout the week.

The Dow fell 59.34, or 0.69 percent, to 8,519.77, after briefly moving into positive territory early in the session, tumbling, and then recovering some of its losses. Yesterday's retreat was the fourth straight daily loss for the Dow.

Broader stock indicators also finished lower. The Standard & Poor's 500 index fell 16.25, or 1.83 percent, to 871.63, and the Nasdaq composite index fell 31.97, or 2.04 percent, to 1,532.35.

The Russell 2000 index of smaller companies fell 11.19, or 2.30 percent, to 475.07. Smaller companies tend to be more vulnerable to economic weakness than larger companies.

On the New York Stock Exchange, declining issues outnumbered advancers by more than 2 to 1. Consolidated volume came to 4.31 billion shares, down from 6.04 billion shares on Friday.

Toyota's U.S.-traded shares fell $3.50, or 5.4 percent, to $60.88.

Light, sweet crude fell $2.45, or nearly 6 percent, to $39.91 a barrel on the New York Mercantile Exchange.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 2.17 percent. The yield on the three-month T-bill, considered one of the safest short-term investments, was up at 0.02 percent.

The dollar was mixed against other major currencies, while gold prices rose.