Stocks shifted lower Thursday as investors' enthusiasm flagged in the face of multiple attacks overseas, weak sales of manufactured goods and a lower forecast from AT&T.
A record reading on home sales for May was a bright spot, suggesting continued economic strength. But violence in Iraq and a pair of bomb blasts in Turkey caused some jitters.
The Dow Jones industrial average sagged 35.76, or 0.3 percent, to 10,443.81. The Nasdaq composite index fell 5.41, or 0.3 percent, to 2015.57. The Standard & Poor's 500-stock index dropped 3.41, or 0.3 percent, to 1140.65.
The markets have been in a torpor all month in anticipation of a pivotal Federal Reserve meeting on interest rates and the transition of power in Iraq next week. Adding to investors' uncertainty, the Commerce Department reported that orders for costly manufactured goods slipped for a second straight month -- a sign that the economic recovery, while strong, remains somewhat uneven.
Concern about rising rates did little to deter home buyers last month, however. A report from the Commerce Department showed sales shot up 14.8 percent in May. Home builders surged on the news. Ryland Group rose $1.67, to $80.16; Pulte Homes gained 45 cents, to $53.69; and Centex increased $1.09, to $48.16.
AT&T fell $1.60, or 9.8 percent, to $14.81, after the telecommunications company cut its revenue forecast for the year to a point below its own expectations and those of Wall Street, largely because of a regulatory decision that prompted it to pull service from seven states.
MCI, the second-biggest U.S. long-distance telephone company, declined 15 cents, to $13.55. Sprint dropped 30 cents, to $16.95, and Citizens Communications fell 86 cents, to $12.29.
* The New York Stock Exchange composite index fell 4.78, to 6597.56; the American Stock Exchange index fell 5.27, to 1250.58; and the Russell 2000 index of smaller-company stocks fell 1.10, to 579.05.
* Advancing issues narrowly outnumbered declining ones on the NYSE and the Nasdaq Stock Market. NYSE trading volume fell to 1.4 billion shares, from 1.44 billion on Wednesday, and Nasdaq volume totaled 1.67 billion, down from 1.79 billion.
* The price of the Treasury's 10-year note rose $4.06 per $1,000 invested, and its yield fell to 4.65 percent, from 4.70 percent on Wednesday.
* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 107.23 yen, down from 108.55 late Wednesday, and a euro bought $1.2168, up from $1.2090.
* Light, sweet crude oil for August delivery settled at $37.93, up 36 cents, on the New York Mercantile Exchange.
* Gold for current delivery rose to $403.10 a troy ounce, from $395.00 on Wednesday, on the New York Mercantile Exchange's Commodity Exchange.
Bloomberg News contributed to this report.