Blue-chip shares closed modestly lower for a second straight session Thursday, while smaller stocks continued to advance as the first quarter draws to a close.
Elsewhere, oil prices rallied again, as did gold and silver. Bond yields inched up. And Indonesian stocks shot higher as the country's beleaguered currency continued to strengthen.
On Wall Street, the Dow Jones industrials finished down 25.91 points at 8,846.89 in a volatile session that saw a late attempt at a rally fizzle. Losers had a tiny edge over winners on the New York Stock Exchange.
But the Nasdaq composite index of mostly smaller stocks gained 4.03 points to a record 1,828.54, as winners topped losers by 22 to 20 in that market.
The Russell 2,000 index, a purer index of smaller stocks, added 0.67 point to a record 477.81.
Until this week, blue chips had been on a spectacular run since mid-January, pushing the Dow's year-to-date gain to 12%.
But a rebound in oil prices and bond yields in recent sessions has encouraged profit-taking in big stocks. With smaller stocks having lagged the Dow for much of the quarter, some investors now appear to be using blue-chip profits to buy into the small-stock sector.
The Russell 2,000 is up 9.3% year-to-date.
Many analysts said the pullback in big-name stocks is overdue.
"It's a very good consolidation, considering the substantial appreciation that's been realized since the beginning of the year, and in 1997 and 1996," said Ned Riley, investment chief at BankBoston.
"The market just wants to settle out here and do some consolidating. It's no surprise," said Richard Cripps, chief strategist at Legg Mason Wood Walker.
If investors needed an excuse to trim their stock holdings, oil provided it Thursday. Near-term crude oil futures resumed their advance, gaining 35 cents to $16.83 a barrel in New York--a seven-week high--on expectations that Norway may join 14 other nations in cutting production to boost sagging prices.
Norway, the second-biggest oil exporter after Saudi Arabia, said it was considering reductions of 3% to 6%. It postponed a decision until April 3, after the Organization of Petroleum Exporting Countries meets to consider cuts of its own.
The inflationary potential of oil's rebound from recent nine-year lows disturbed the bond market again Thursday. The yield on the 30-year Treasury bond climbed from 5.94% on Wednesday to 5.97%, highest since March 6.
For the stock market, first-quarter corporate earnings reports will dominate the news in coming weeks, analysts noted. Wall Street has slashed its expectations for first-quarter earnings growth, in part because of the depressant effect Asia is having on many U.S. companies' results.
Still, some reports Thursday suggested that estimates may not have been reduced enough. Software firm Adobe Systems, for example, reported earnings of 38 cents a share for the quarter ended Feb. 27, well below analysts' consensus estimate of 44 cents. The firm cited weaker-than-expected Asian demand for its products.
The report was issued after the market closed. Adobe stock rose $3.56 to $48 in regular trading on Nasdaq but is likely to dive today, analysts said.
Among Thursday's highlights:
* The tech sector was mixed. Intel gained $2.13 to $78.19 after announcing a 100-million-share stock buyback; it also announced that its chief executive will step down.
But Broderbund Software tumbled $2.81 to $21.06 after reporting lower-than-expected earnings. And Komag slid 56 cents to $15.01 after saying that a glut of disk drives will push sales down in the first quarter and produce a loss.
* Most drug stocks were hit by profit-taking for a second day. Merck lost $1.50 to $128.50, Bristol-Myers Squibb sank $1.06 to $103.88 and Schering-Plough was off 44 cents to $81.50.
* Some investors turned to out-of-favor groups. Gold-mining stocks rallied as gold's price rose $2.60 to $301.70 an ounce. Silver gained 18 cents to $6.35 an ounce.
Among miners, Barrick Gold gained $1.50 to $21.31 and Newmont Gold jumped $2.25 to $31.
* Many real estate investment trust shares also turned higher. The group has lagged badly this quarter. Arden Realty rose 63 cents to $28.69 and Spieker Properties rose 75 cents $41.81.
* Among Southland issues, Fidelity National jumped $1.19 to $36 after agreeing to buy Matrix Capital, which surged $6.56 to $27.31.
In foreign trading, Indonesia's main stock index leaped 5.7% to 532.81, for its biggest one-day gain in eight weeks, as the more stable rupiah and optimism about solutions to the country's foreign-debt problem attracted investors.
The rupiah closed at 8,475 to the dollar. It has strengthened from 10,650 on March 9.
Among U.S.-traded Indonesian stocks, Indosat gained $1.25 to $16 and Indonesia Telecom jumped $1.38 to $10.31.