"It's an earnings game from here on out," said Mike Kayes, chief investment officer at Eastover Capital in Charlotte, N.C. "We'll be in for some choppy days until we have a clear direction on what earnings might look like."

The Dow Jones industrial average closed down 66.88, or 0.7 percent, at 9,156.21, following a two-day gain of 152 points.

The broader market finished mixed. The Nasdaq composite index inched up 1.06, or 0.1 percent, to 1,747.52, having advanced 83 points this week to its highest level in nearly 15 months.

The Standard & Poor's 500 index declined 5.62, or 0.6 percent, to 1,002.22, following a two-day gain of 22 points.

Dow component Altria Group slid $2.77, or 5.9 percent, to $44 on speculation that an Illinois appellate court might overturn a lower court's decision to lower the bond amount the parent of Philip Morris needs to appeal a $10.1 billion tobacco verdict.

A government report of an unexpected drop in wholesale inventories also pressured stocks. The Commerce Department reported that inventories fell 0.3 percent in May to a seasonally adjusted level of $289.34 billion. Economists had predicted a 0.1 percent rise.

While stocks have rallied in recent months, investors are now eagerly looking to second-quarter earnings for more solid proof that the economy is rebounding.

Analysts said an absence of significant positive news also prompted many investors to sell, unlike yesterday's string of merger announcements that helped the Dow overcome early losses to close modestly higher.

"The biggest question is whether technology will continue to lead and earnings will accelerate," Kayes said. "Investors are holding their breath until that occurs. ... Investors are wondering do we jump into tech stocks now given the big advance or sell them if earnings don't go through?"

Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee, agreed.

"The general feeling is that a lot of things are in place to get the market going ­ interest rates are low, and we have a tax (cut) package," he said. "The market in general is digesting the big runup that we've had, looking at second-quarter earnings and waiting for the next big significant news."

Tenet Healthcare slipped 5 cents to $12.10 after the hospital chain said it received a civil subpoena from the Securities and Exchange Commission indicating a formal investigation; the SEC had been informally reviewing the company's Medicare charges since November.

Alcoa fell 34 cents to $25.47 although the Dow component's second-quarter earnings beat analysts' estimates by 3 cents per share; Morgan Stanley cut the company's stock rating to "equal-weight" from "overweight."