The stock market fell back from a big early rally and closed mixed, unable to sustain its advance amid continuing concerns about interest rates. The technology-dominated Nasdaq Stock Market also lost ground after early gains but ended the session with a third straight record close.
The Dow Jones industrial average closed down 66.67 at 10,581.84 after sacrificing a gain of more than 100 points. The Dow also fell more than 81 points on Monday.
Broader stock indicators were mixed. The Standard & Poor's 500 closed down 6.38 at 1347.74, and the Nasdaq composite index rose 13.98, to 2981.63.
Paul McEnroe, an assistant manager at Brown Brothers Harriman & Co. in New York, said investors were apparently looking for hints from Federal Reserve Chairman Alan Greenspan on whether Fed policymakers will raise interest rates at their next meeting, on Nov. 16. But when the Fed chairman avoided any talk of monetary policy during a talk to bankers in Florida this morning, investors decided to collect their profits.
In addition, McEnroe noted that many investors apparently sold technology stocks after the Nasdaq crossed the psychologically important 3,000 level.
The sell-off occurred in specific sectors, notably Internet stocks. Many popular online companies closed lower. Amazon.com fell 2-11/16, to 66-7/17; eBay fell 5 3/4, to 131 1/4; and Yahoo fell 2-11/16, to at 178.
But while much of the technology sector was battered, semiconductor stocks fared well, an indication of just how fractious the stock market is. Texas Instruments rose 1 7/8, to 88 7/8, and Applied Materials rose 3 3/8, to 91 1/8.
And the market was willing to reward stocks that delivered good news. Goto.com shot up 22 3/4, to 80, after announcing better-than-expected third-quarter results.
Analysts said the market was cautiously optimistic early in the session after a report indicated the economy is slowing and may not need a prod from the Fed.
The Commerce Department said Americans' personal income held steady in September. Their spending rose 0.4 percent, slightly more than the 0.3 percent increase analysts had predicted.
In after-hours trading, Bloomberg News reported, Qualcomm jumped 13-3/16, to 238, after reporting better-than-expected earnings for its fourth quarter.