Investors were unsure how to read the latest Labor Department job creation report, which showed 157,000 jobs created in December — less than the 175,000 expected, but still high enough to show continued growth in the labor market and hopefully stave off inflation and higher interest rates from the Federal Reserve.

But with wage growth slipping, according to the Labor Department, and a wave of corporate earnings releases due next week, investors remained skittish about placing large bets. The major indexes drifted in and out positive territory throughout the session before settling slightly lower.

"I think some people were looking for a bit more wage growth, better figures in the jobs report," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. "We're in an oversold market just catching its breath before the weekend, and after that, it's all about earnings."

According to preliminary calculations, the Dow Jones industrial average fell 18.92, or 0.18 percent, to 10,603.96.

Broader stock indicators saw modest losses. The Standard & Poor's 500 index was down 1.70, or 0.14 percent, at 1,186.19, and the Nasdaq composite index dropped 1.39, or 0.07 percent, to 2,088.61.

The first week of 2005 was a difficult one for Wall Street, as the major indexes fell four out of the five sessions. Profit-taking from the strong rally in November and December, combined with fresh fears about inflation and higher interest rates, stole momentum from buyers and caused many investors to cash in their recent profits until new opportunities could be had.

For the week, the Dow lost 1.66 percent, the S&P fell 2.12 percent and the Nasdaq tumbled 3.99 percent.

"It seems like our clients want to be engaged, want to be investing, but they're just not willing to step up right now," said Brian Belski, market strategist at Piper Jaffray. "But I think it's good people are being conservative. We're getting the selling out of the way now, and then we can buy on the fundamentals during earnings season."

Investors this week were primarily concerned that the Federal Reserve might hasten its plans to raise the nation's benchmark interest rate, which stands at 2.25 percent. In the minutes of its Dec. 14 meeting, released Tuesday, the Fed raised concerns about possible inflation. Mediocre job growth, however, was seen as a buffer against faster or steeper rate hikes, since companies will likely want cheaper capital in order to create jobs.