NEW YORK » Caution reasserted itself on Wall Street, sending stocks down sharply but not enough to stop the market from notching its third straight weekly advance.

Major indexes fell about 2 percent yesterday, but most analysts agreed the pullback was a natural response to the market's powerful climb this month. Financial and technology stocks led the retreat, and energy shares fell along with the price of oil.

A dip in personal incomes and a slowdown in personal spending gave investors reason to cash in some of their winnings after the Dow Jones industrial average surged 21 percent over just 13 days. Analysts said the sentiment in the market was still more upbeat than it was a month ago, but the data were a reminder that the economy and the banking system remain troubled.

“;There is still a definite caution in the air,”; said Doreen Mogavero, president of Mogavero, Lee & Co., a New York floor brokerage, adding that she's noted some hesitance among her clients. “;I don't think people are completely invested yet.”;

Mogavero noted that the money that has gone into the market over the last few weeks has been “;short-term”; in nature, which leads her to believe that most people are not convinced that the economy will soon recover.

The market has been ratcheting up and down over the past week. Many analysts believe back-and-forth trading is actually a healthy way for stocks to recover, because it reflects a conservative rather than euphoric attitude among investors.

“;I wouldn't read too much into a down (yesterday),”; said Sam Stovall, chief investment strategist, U.S. equity research at Standard & Poor's. “;It's simply investors taking profits.”;

Still, it was too early to tell whether the big March advance might go the way of Wall Street's year-end rally, which was more than wiped out in January and February. The gains of the past three weeks have been based on early signs of improvement in the banking system and the economy, but those advances are vulnerable to critical economic data due next week and first-quarter earnings reports that will begin in a few weeks.

The Dow fell 148.38, or 1.9 percent, to 7,776.18.

The Standard & Poor's 500 index fell 16.92, or 2 percent, to 815.94 and the Nasdaq composite index dropped 41.80, or 2.6 percent, to 1,545.20.

Despite the decline, the indexes are still looking much better than they did a month ago:

The Dow is up 17.3 percent in the last three weeks, its best gain since September 1982 and its longest string of advances since May last year.

Still, the market has a long way to go before it can be considered to be recovering. The Dow is down 6,388.35, or 45.1 percent, from its record close of 14,164.53 reached Oct. 9, 2007.

For every advancing stock there were about three that fell on the New York Stock Exchange. Consolidated volume came to 5.48 billion shares, compared with 6.84 billion on Thursday.

The Russell 2000 index of smaller companies fell 16.30, or 3.7 percent, to 429.00.

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

Government bonds fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.76 percent from 2.74 percent.

Crude oil fell $1.96 to settle at $52.38 a barrel on the New York Mercantile Exchange.