In a replay of Tuesday's session, some strong economic reports got the stock market's bulls running early Wednesday, but rising interest rates again snuffed out most of the gains by the end of the day.
In other trading, gold pulled back after reaching an 18-year high of $500 an ounce. Natural gas prices continued to surge on cold-weather concerns.
European stock markets were mostly lower ahead of an expected interest-rate increase today by the European Central Bank.
On Wall Street, the Dow Jones industrial average sank 82.29 points, or 0.8%, to 10,805.87 after rallying about 36 points in morning trading. It was the Dow's third straight loss.
The Standard & Poor's 500 fell 8 points, or 0.6%, to 1,249.48.
A raft of economic data, most of it upbeat, encouraged equity investors early on.
The government revised its estimate of third-quarter economic growth to a 4.3% real annualized rate, up from a previous estimate of 3.8%.
Also, the Federal Reserve's latest report on regional economic activity pointed to continued strength in November, as did a separate report on Chicago-area manufacturing activity.
The stock market was happy with the news, but the bond market wasn't: Treasury bond yields rose, with the two-year T-note ending at 4.41%, up from 4.39% on Tuesday and the highest since Nov. 15.
The two-year note is particularly sensitive to expectations for Federal Reserve interest rate moves, and the latest economic data suggest the central bank has no reason to pause soon in its credit-tightening campaign, many analysts say.
"The U.S. economy will remain strong enough for the Fed to tighten further," said Jan Lambregts, head of research at Rabobank Singapore. "The overall data will support the case that the Fed will continue to tighten to 5% by May 2006," he said.
The Fed's key short-term rate now is 4%. Policymakers meet again on Dec. 13.
Stocks had rallied sharply for most of November, in part on hopes that interest rates might be nearing their peak. The 10-year Treasury note yield, which hit a 17-month high of 4.66% on Nov. 4, fell to 4.40% as of Monday. But it rebounded Tuesday to 4.48% and inched up to 4.49% Wednesday amid the barrage of strong economic data.
Falling energy prices also were bullish for stocks last month, but prices have stabilized in recent days. Near-term crude oil futures in New York rose 82 cents to $57.32 a barrel Wednesday after the government said U.S. oil inventories fell 4.2 million barrels last week, a bigger-than-expected decline.
