Stocks closed mixed as investors continued to collect profits from last week's rally. A strong report on worker productivity and selected strength in technology stocks enticed some buyers but failed to lift the broad market.
The Dow Jones industrial average fell 118.36 to close at 11,106.65. The decline was the Dow's steepest since Oct. 25.
Broader stock indicators were mixed. The Nasdaq composite index rose 40.91, to 3586.92, its 20th new record close since Oct. 29, largely because of a 23 percent gain by Internet search company Yahoo.
The Standard & Poor's 500 fell 14.17, to 1409.17.
Most analysts expected investors to cash in some of the gains that have come from the market's big rally. The Nasdaq has risen 63 percent this year, the S&P 500 set a new closing high last Friday, and the Dow has come within 40 points of its closing record of 11,326.04, reached Aug. 25.
"Given the strength of the market last week, it's not unusual to see some scattered weakness," said Robert Freedman, chief investment officer for the John Hancock Funds in Boston. "The upward momentum is still there, but we're seeing some profit-taking and some weakness in a couple of stocks."
For a second consecutive session, Coca-Cola dragged the Dow lower, falling 4-39/64, to 60, as of 5:45 p.m. The company said Monday that its chairman and chief executive, M. Douglas Ivester, is stepping down after a troubled 2 1/2-year tenure. Today, at least two Wall Street analysts downgraded their ratings on Coke stock.
Microsoft fell 2-7/16, to 93. On Monday, government lawyers filed papers that detail Microsoft's alleged antitrust violations, laying the ground for a federal judge to rule on the case early next year.
Other Dow losses were scattered across sectors: Johnson & Johnson fell 3-7/16, to 93 3/8, General Motors fell 4-229/256, to 72 5/8, and 3M lost 4-13/16, to 93.
The Nasdaq might have fallen prey to profit-taking without Yahoo, which soared 67-3/16, to 348, on the Nasdaq. The company was added to the S&P 500 after the close of trading today, guaranteeing at least a short-term boost while fund managers who track the index buy shares to keep their portfolios up to date.
Beyond Yahoo, technology shares were mixed. Online auctioneer eBay fell 12 3/4, to 163 3/4. Computer maker Gateway fell 4 3/8, to 66 3/4, on concerns that a supply crunch at Intel will prevent Gateway from meeting consumer demand.
With so much corporate news at hand, investors skated past the latest good news on the U.S. economy. The Labor Department reported American workers' productivity grew in the third quarter of 1999 at the fastest rate in seven years, while labor costs declined.
Bond investors applauded the report. The price of the Treasury's benchmark 30-year bond rose $5 per $1,000 invested, and its yield fell to 6.20 percent, from 6.24 percent late Monday.
"The market seems to be taking the numbers in stride," Freedman said. "Investors realize that we'll continue to have some mixed numbers, but they're leaving their money invested because they feel the economy is, for the most part, in good shape."