Disappointing earnings from Alcoa Inc., the first of the 30 Dow industrials to report, disturbed investors. The Dow fell more than 44 points in opening trading, but rebounded in the afternoon to close nearly even. The Nasdaq composite rose slightly after Apple Computer Inc. hit a 52-week high.

The mixed day came after a surge in buying during the first five trading days of 2006 that sent all the major indexes to at least four-and-a-half year highs. The rally took off after the Federal Reserve signaled the central bank was near the end of its streak of short-term interest rate hikes.

"This has been one of the strongest starts of the year we've had in many years," said Linda Duessel, market strategist at Federated Investors in Pittsburgh. "You shouldn't expect it to keep on going."

With the market priced as it is, she said, "we're more beholden to earnings and earnings outlooks. We could set ourselves up for disappointment if earnings don't come in in a positive way."

The Dow Jones industrial average fell 0.32, or nearly zero percent, to 11,011.58. The average of 30 blue-chip stocks gained 52.59 yesterday to close at 11,011.90. The last time the Dow finished above 11,000 was June 7, 2001, when it closed at 11,090.74.

Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index fell 0.46, or 0.04 percent, to 1,289.69, and the Nasdaq composite index rose 1.63, or 0.07 percent, to 2,320.32.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.43 percent from 4.38 percent late yesterday. The U.S. dollar was little changed other major currencies. Gold prices fell after briefly reaching their highest level in 25 years.

Crude oil futures fell after rising on concerns that Iran was restarting its nuclear program and would further destabilize the Middle East. A barrel of light crude settled at $63.37, down 13 cents, on the New York Mercantile Exchange.

Today's only meaningful economic data was the Commerce Department's November wholesale inventory report, which, excluding petroleum products, was nearly flat.

"I think this is a one-day pause," said Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis. "I'd be really surprised if this was all there is to this rally. ... I don't see anything in the tape today that leads me to think this trend should be over."

The day's trading pattern was the reverse of one seen often in last year's sell-off: Losses narrowed in the afternoon and advancing issues caught up with decliners. In December, investors saw many early leads whittled to losses in afternoon trading as declining issues met advancers.

Alcoa fell 97 cents to $29.60 after the aluminum producer missed Wall Street's earnings projections. The company said energy costs and refineries impaired by Gulf Coast hurricanes trimmed its quarterly income by 16 percent.

Phelps Dodge Corp., one of the world's largest copper producers, fell $7.97, or 5.16 percent, to $146.58 after it said fourth-quarter earnings will fall well below previous expectations, with higher copper prices, shortfalls in production and sales, and one-time costs dragging down profits.

Heart device maker Guidant Corp. rose 39 cents to $69.39 after it said its fourth-quarter sales would be below analysts' expectations. Guidant suffered a setback over the summer when it had to recall thousands of ICDs and pacemakers because of possible defects. The recall caused suitor Johnson & Johnson to lower its bid for the company to $21.5 billion from $25.4 billion, but heart device maker Boston Scientific Corp. turned around and offered $25 billion for the company. Boston Scientific rose 60 cents to $26.48 and J&J rose 11 cents to $63.10.

Apple Computer Inc. hit a new 52-week high, climbing $4.81 to $80.86, after the company said it sold 14 million iPods over the holidays, up from 4.6 million a year ago. The company also said its shift to Intel Corp. microprocessors will come earlier than expected. CEO Steve Jobs unveiled an updated iMac computer based on the world's largest semiconductor company's new two-brained chip. Intel fell 35 cents to $26.12.

The Russell 2000 index of smaller companies rose 4.75, or 0.67 percent, to 710.99, its second record high in a row. The Russell rose 6.85 on yesterday, closing at 706.24, the first time the index pierced the 700 level.

Advancing issues outnumbered decliners by roughly 9 to 7 on the New York Stock Exchange, where preliminary consolidated volume was 2.43 billion shares, up from 2.33 billion yesterday.

Overseas, Japan's Nikkei stock average fell 1.85 percent. Britain's FTSE 100 fell 0.75 percent, Germany's DAX index lost 0.77 percent, and France's CAC-40 dropped 0.27 percent.