Analysts said many investors were taking a wait-and-see attitude before the upcoming earnings period. Trading also was choppy due to technical factors in advance of Friday’s quadruple-witching day, the quarterly expiration of index futures and options as well as individual stock futures and options.

"There’s not much driving the market in either direction today," said Hugh Johnson, chief investment officer at First Albany Corp. "It’s a quiet period before an important period — the third-quarter announcement season" later this month.

"The expectation is that third-quarter earnings reports will be very good," he said. "The hope is that we’ll start to see some growth in employment, but investors generally are waiting to see it unfold."

The Dow Jones industrial average closed down 21.69, or 0.2 percent, at 9,545.65, having gained 118 points yesterday.

The broader market also finished modestly lower. The Nasdaq composite index declined 4.15, or 0.2 percent, to 1,883.10. The Standard & Poor’s 500 index fell 3.35, or 0.3 percent, to 1,025.97.

The Commerce Department reported today that builders started work on 1.82 million housing units at a seasonally adjusted annual rate last month. Analysts were predicting a level of 1.89 million units.

After sending stocks higher since mid-March, trading has been choppy in recent days as investors study economic data closely for evidence of a strong rebound. Yesterday’s rally followed the Fed’s decision to keep rates stable and its statement suggesting it would keep interest rates low.

"People were relieved that the Fed was not going to raise rates for awhile," said Todd Leone, managing director of equity trading at SG Cowen Securities. "Tobacco stocks are the biggest gainers, but the rest of the market is kind of quiet."

Decliners included DuPont, which dropped $1.50 to $42.47, after the company said its 2003 earnings would be at the lower end of estimates.

Energy stocks also took a hit after crude oil prices dropped to a four-month low. Exxon Mobil Corp. decreased 87 cents to $36.84, while ChevronTexaco Corp. declined 73 cents to $72.27.

Best Buy Co. fell $1.18 to $51.48 although the electronics retailer reported earnings that met expectations.

But Altria Group Inc. climbed $4.19, or 10.4 percent, to $44.65 after the Illinois Supreme Court ruled that a lower court must reinstate a reduced $6 billion bond required for its tobacco unit Philip Morris to appeal a legal defeat.

R.J. Reynolds Tobacco jumped $4.67, or 13.7 percent, to $38.86, after the second largest cigarette maker said it will cut about 2,600 jobs, or 40 percent of its work force.