While investors were cheered by a better-than-expected reading in the Labor Department's consumer price index, they are increasingly preoccupied with earnings, and fear that lower prices will translate into lower profits.

"This should be good news. It takes inflation off the table as a concern, at least for now," said Daniel Portanova, managing director of Gartmore Separate Accounts LLC. "But I think the bigger question now is the sustainability of the recovery and profits going forward."

The Dow Jones industrial average dropped 23.38, or 0.2 percent, to 10,139.78, more than giving up a 75-point gain from earlier in the session.

Broader stock indicators were also lower. The Standard & Poor's 500 index was down 5.30, or 0.5 percent, at 1,101.39, and the tech-heavy Nasdaq composite index fell 29.56, or 1.6 percent, to 1,883.15. It was the lowest close on the Nasdaq since May 17.

For the week, the Dow fell 0.7 percent, the S&P dropped 1 percent and the Nasdaq plunged 3.3 percent. It was the third straight down week for the Nasdaq, the fourth for the Dow and the fifth for the S&P 500. Today's session followed a now weeks-long pattern, in which the market stagnated or skidded lower even though there was upbeat news.

"First you have the political environment with the election, then you have the concern that profits will slow down significantly going into 2005, and finally, the geopolitical situation abroad is kind of lingering in the background," said Chris Wolfe, global head of equities for J.P. Morgan Private Bank. "We may have good earnings, but investors are discounting these other things instead."

Investors' uneasy mood led them to look past good news in the recently battered tech sector.

IBM Corp. not only beat Wall Street expectations by 4 cents per share in the second quarter, but gave a strong positive outlook for the remainder of the year. Rival Dell Inc. also came out with a bullish outlook prior to its Aug. 12 earnings report. IBM climbed 26 cents to $84.28, while Dell rose 55 cents to $35.42.

Martha Stewart Living Omnimedia Inc. climbed $3.17 to $11.81 after its namesake founder was sentenced to just five months in prison and five months of home confinement for lying about a stock sale unrelated to her company. Stewart will remain free while she appeals the verdict. The stock was the highest percentage gainer on the New York Stock Exchange, trading approximately 17.1 million shares.