"We've had a pretty good rally and have seen new highs, so we may need to catch our breath today," said Steve Goldman, chief market strategist at Weeden & Co.
The Dow Jones Industrial Average dropped 22 points to close at 12,309.
General Motors Corp. weighed on the blue-chip average, losing 2.5%, after Fitch Ratings said the auto industry is headed for a "turbulent" 2007.
Dow-component Merck, also weighed, falling nearly 1% after the drug maker reaffirmed its flattish earnings forecasts for 2006 and slightly higher earnings for 2007.
The S&P 500 dropped nearly 2 points to 1,412 and the Nasdaq Composite lost over 6 points to 2,445.
Shares of Yahoo Inc. fell 2.1%. Late Tuesday the internet portal announced the departures of Chief Operating Officer Dan Rosensweig and Lloyd Braun, who heads the media group, overseeing content. See full story.
The shake-up follows growing concern about the direction of the Sunnyvale, Calif.-based company over the past two years, which have seen Yahoo fall further behind Google Inc.
The banking sector was also weighing after HSBC Holdings Plc said that revenue growth has slowed due to reduced lending and mentioned that loan delinquencies have increased in the U.S. See full story. HSBC shares fell nearly 1%.
Trading volume was 1.5 billion shares on the New York Stock Exchange and 1.9 billion on the Nasdaq.
Decliners beat advancers 19 to 15 on the Big Board and 16 to 13 the Nasdaq.
The futures contract for the Dow Jones Industrial Average last was down 18 points at 12,330.
Futures contracts for the S&P 500 and the Nasdaq 100 were 2.40 points lower at 1,414.30 and 6 points off at 1,802.
On Tuesday stocks posted strong gains after new data showed a pleasing combination of services sector growth and weaker-than-expected inflation.
Investors are likely to step back and assess the recent vigorous rally when the market opens on Tuesday.
"We've had a pretty good rally and have seen new highs, so we may need to catch our breath today," said Steve Goldman, chief market strategist at Weeden & Co.
"But I still think stocks are going to find support on minor pullbacks and that the year will end on an up note."
There was scant reaction to the latest ADP data which measures private employment. The report showed that 158,000 new jobs were created last month, marking the largest gain since June.
Together with an estimated 15,000 government jobs that aren't included in the ADP index, the report suggests non-farm payrolls likely grew by about 170,000 in November.
The report arrived ahead of Friday's much-awaited monthly unemployment report. The MarketWatch forecast, based on a survey of economists, is that the report that just 110,000 new jobs were created last month. But the ADP report suggests that figure is too conservative.
MarketWatch also is forecasting that the jobless rate will rise a bit to 4.5% from 4.4%.
Wage inflation is expected to decline to a 0.3% rate of increase from 0.4% in October, a development that would please the market because it would take some of the pressure of the Federal Reserve to lift rates.
US market to open Down .... No la, iPunter, anyone can post US market. I may need to go holiday like S'poregal one day too. With only the oil stock data to be out tonite, oil-related counters will be affected due to expected excess oil stock.
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INDICATIONS
U.S. stock futures point to weak open
ADP index suggests strong Nov. job market; Yahoo in the spotlight
Data suggesting the labor market may have been stronger-than-expected in November limited the downside.
S&P 500 futures slipped 2.70 points to 1,414.00 and Nasdaq 100 futures lost 6.00 points to 1,802.00. Dow industrial futures shed 15 points to 12,333.
On Tuesday, the Dow industrials advanced 47 points -- closing 11 points shy of an all-time high -- the Nasdaq Composite rose nearly 4 points and the S&P 500 ended 5.6 points higher at a 6-year high. Data showing services sector growth and weaker-than-expected inflation lifted stocks.
Private employers in the U.S. created 158,000 new jobs in November, according to the ADP employment index, the largest gain since June. Including an estimated 15,000 government jobs that aren't included in the ADP index, the report suggests nonfarm payrolls likely grew by about 170,000 in November.
Economists surveyed by MarketWatch expect the Labor Department to report on Friday a gain of 110,000 nonfarm jobs.
The U.S. dollar rose following the release of the ADP index. The euro was down 0.4% at $1.3263 and the buck added 0.1% vs. the yen to 115.07.
Investors are also likely to focus on weekly energy supplies data. Crude futures were down 27 cents at $62.16 a barrel in electronic trading ahead of those figures, due out around 10:30 a.m. Eastern (S'pore 2330hrs).
The Dow Jones Industrial Average gained 47 points to close at 12,331, just off its intraday high of 12,335 and slightly below its all-time closing high of 12,342.
Coca Cola Co. was the biggest gainer among blue chips, rising 2.5% to $48, a 2 1/2-year high, after Merrill Lynch raised its price target on the stock to $51 from $48.
The S&P 500 Index rose 5 points to 1,414, and the Nasdaq Composite Index gained 4 points to 2,452.
After a mixed opening, stocks turned positive after the Institute for Supply Management's survey of the service sector showed better than expected growth.
Last week, the ISM manufacturing survey showed that the sector had contracted in November, sparking fear of a so-called hard landing for the U.S. economy.
"We are a service-sector economy," said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
"This supports the idea that we can avoid a recession," he said, although "the big number will be the [November] employment report on Friday."
Overall, the strategist believes that the market remains in the middle of a Santa Claus rally, which traditionally takes stocks higher through the end of the year.
Few money managers want to cash in their gains in December, as their clients would then have to pay taxes on them in April of next year. If they wait until Jan. 1, taxes on those gains won't have to be paid until April 2008.
"The market doesn't seem to care, even when we get bad economic data," Mendelsohn added. "I'm blown away by the power of this rally, in spite of the inverted yield curve and the economy deteriorating."
One data positive and the other one negative ....... Clashes of the US market! But ISM winning: Dow up 33 points while Nasdaq up 8 points now. Happy can closed flat tonite liao ....
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U.S. Nov ISM services index rises to 58.9, highest since May
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