Better-than-expected wholesale inflation figures gave Wall Street some hope of extending its New Year's advance, but Michael Sheldon, chief market strategist at Spencer Clarke LLC, attributed the listless trading mostly to an overbought market. Stocks surged to fresh 4 1/2-year highs this week.

Coupled with lackluster earnings from Dow Jones industrials Alcoa Inc. and DuPont Inc. earlier in the week, "investors face an uphill battle in trying to push stock prices higher," Sheldon said. "Overall, the tone of the market remains positive, but we could easily see a bit of profit taking or consolidation before stocks start to head higher again later this month."

Investors have turned much of their attention to the fourth-quarter earnings season, which kicks into full swing beginning Tuesday. They will be looking for signs of whether trouble lays ahead on the economic or corporate fronts.

According to preliminary calculations, the Dow lost 2.49, or 0.02 percent, to 10,959.87. Earlier this week, the Dow topped 11,000 for the first time since June 2001, closing Wednesday at a 4-year high of 11,043.44.

Broader stock indicators were also off multiyear highs reached this week. The Standard & Poor's 500 index finished up 1.55, or 0.12 percent, at 1,287.61, and the Nasdaq composite index rose 0.35, or 0.02 percent, to 2,317.04.

Bonds added to the prior day's gains, with the yield on the 10-year Treasury note falling to 4.36 percent from 4.41 percent late yesterday. The dollar was mixed against most major currencies, while gold prices edged upward.

The U.S. markets will be closed Monday for Martin Luther King Jr. Day.

Crude futures pared earlier losses while natural gas continued sliding. A barrel of light crude fell 2 cents to settle at $63.92 on the New York Mercantile Exchange, where natural gas lost 15.2 cents to $8.791 per 1,000 cubic feet.

Traders were optimistic about a Labor Department report that its core producer price index grew just 0.1 percent in December, less than the 0.2 percent rise forecast by economists. While overall PPI growth surged 0.9 percent, traders were likely comforted by a second straight monthly decline in crude material prices, Sheldon said.

The inflation data — a precursor to consumer-level increases — tempered a drop in monthly retail sales growth, which slowed to 0.7 percent and missed economists' targeted gain of 1 percent, the Commerce Department said.

Over the next several weeks, investors will be focused on quarterly earnings while keeping a close watch on the Federal Reserve's actions at its Jan. 31 meeting, said Jack Caffrey, equities strategist for JPMorgan Private Bank.

"It's not just what you deliver, but what your future is likely to hold," Caffrey said of the earnings reports. "I feel like there is a lot of one-time noise in earnings. That's going to create volatility for some stocks."

A sharp selloff yesterday gave back most of the market's gains this week, with the Dow rising 0.01 percent, the S&P 500 gaining 0.17 percent and the Nasdaq up 0.5 percent for the week.

In corporate news, Lucent said its annual revenue growth would be slower than previously forecast because of lagging sales in the United States and China. Lucent fell 6 cents to $2.65.

Tyco confirmed a rumored move to split its security, electronics and healthcare businesses into three public units, but warned that its first-quarter and yearly earnings would miss prior estimates. Its shares sank $3.19 to $27.12.

Hospital operator HCA Inc. gained $1.75 to $50.94 after saying its fourth-quarter profit could top current Wall Street estimates and affirming its projected full-year earnings.

In acquisition news, Boston Scientific Corp. came back with a $24.9 billion bid — increased by $330 million — for Guidant Corp., which yesterday accepted Johnson & Johnson's $23.2 billion offer. Boston Scientific rose 15 cents to $25.20 and Guidant added 44 cents to $70.84, while J&J dropped 39 cents to $61.82.

General Motors Corp. said it expects $4 billion of savings this year from restructuring measures aimed at lowering annual structural costs by $6 billion and material expenses by $1 billion. GM nonetheless slid 59 cents to $20.37.

Late yesterday, International Business Machines Corp. said the Securities and Exchange Commission has opened a formal probe into the company's forecast for stock-option expenses in the first quarter of 2005. IBM dropped 40 cents to $83.17.

Advancing issues led decliners by 6 to 5 on the New York Stock Exchange, where volume of 1.57 billion shares lagged the 1.74 billion shares that changed hands yesterday.

The Russell 2000 index of smaller companies gained 1.65, or 0.23 percent, to 708.44. Wall Street's 2006 rally carried the Russell 2000 above the 700 level for the first time ever on Monday.

Overseas, Japan's Nikkei stock average added 0.06 percent. FTSE 100 tumbled 0.42 percent, Germany's DAX index plunged 1.07 percent, and France's CAC-40 was lower by 0.81 percent.