Stocks edged lower in light trading on Wednesday as a stronger dollar tempered better-than-expected Midwest business activity.
While investors looked to the data for signs a recovery is taking hold, some traders have moved to safer assets like the dollar to lock down profits after a strong 2009.
The Institute for Supply Management-Chicago business barometer surged to a four-year high, topping forecasts, on a recovery in employment and accelerating new orders.
I'm surprised the markets didn't move higher on the news than they did since it was so strong, said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville.
It seems to me that the markets got overbought last week and that's taking away from this week, as there's less room to grow.
The Dow Jones industrial average fell 12.84 points, or 0.12 percent, at 10,532.26. The Standard & Poor's 500 Index edged down 2.56 points, or 0.23 percent, at 1,123.64. The Nasdaq Composite Index lost 6.55 points, or 0.29 percent, at 2,281.83.
In Tuesday's session, indexes were modestly lower to snap a six-day streak of gains.
Semiconductor issues gained after Kaufman Bros upgraded both Marvell Technology Group Ltd and Nvidia Corp to buy, saying they could benefit from improved demand for personal computers.
The Philadelphia Semiconductor index gained nearly 1 percent, while Marvell added 2.6 percent to $20.79 and Nvidia was up 3.6 percent at $18.66.
Health insurance stocks were pressured after Aetna Inc said it expects to take a charge to cover job cut costs and real estate consolidation.
Aetna slid 2.3 percent to $32.12, while Cigna Corp was off 1.7 percent to $35.59, and WellCare Health Plans Inc shed 2.5 percent to $37.36.
The U.S. dollar index rose 0.3 percent against a basket of currencies and hit a three-month high against the yen.
The dollar hurt commodities, with the S&P energy index down 0.4 percent.