Stocks closed modestly lower as investors took a pause ahead of a key employment report to come Friday.
The Dow Jones Industrial Average closed lower, as well as the Nasdaq and S&P 500 .
On Thursday, traders will examine weekly initial jobless claims and the government's natural gas inventory report. However, the data most economists will be focusing on is the November jobs report on Friday. It will be the last key economic indicator released before the December 12th Federal Reserve meeting on interest rates.
Shares of Web portal Yahoo! acted as a drag on the Nasdaq down after the company announced a reorganization plan that includes a shakeup of top management.
CFO Susan Decker has emerged as the likely sucessor to CEO Terry Semel. Decker takes over Yahoo's advertising business unit.
Some analysts are wondering if this reorganization is drastic enough to re-energize the company.
"The management change is a positive direction," said JP Morgan Internet Analyst Imran Khan, appearing on CNBC's "Street Signs." "We are glad to see that senior management is recognizing the issues with the business. However, we are remaining neutral because we are not very optimistic. We think the estimates for 2007 are very optimistic."
Yahoo stock has struggled over the past year while competitor Google has soared to as high as $513 a share.
Shares of automaker General Motors dropped sharply in late-day trading and Ford Motor Company closed lower after Ford boosted its sale of convertible bonds from $3 billion to $4.5 billion. Trading volume for Ford was high with 170 million shares trading hands.
Fitch Ratings said in a report that the U.S. auto market is likely to remain volatile in 2007. However, Fitch said GM and Ford have sufficient liquidity to finance negative cash flows.
Oracle shares dropped after Lehman Brothers advised clients to sell the stock. Analyst Israel Hernandez said in a note that quarterly sales of the company's database software may fall short of investor expectations.
Shares of Novell fell after the software company posted a profit in its fourth quarter, but forecasted 2007 revenues would be below analysts' expectations.
Shares of Dow component Merck came under pressure after the drug maker stood by its forecast of flat earnings for 2006 and projected only slightly higher results for 2007.
Traders also digested a stronger-than-expected ADP Employment Report that said 158,000 private jobs were added to payrolls in November. Treasury prices dropped after the report, sending yields higher. The dollar rose against other major currencies following the data release.
The Energy Department said crude oil supplies declined by 1.1 million barrels last week from the week prior. Analysts had expected oil inventories to rise. Gasoline supplies also declined by 1.1 million barrels.
Oil prices initially rose on the news, but finished the day down moderately.
European Stocks Close Mostly Flat; Asia Finishes Mixed
London's FTSE-100 closed basically flat. Frankfurt's DAX treaded water as well, and the Paris CAC-40 turned modestly lower.
Stocks in Tokyo finished higher, but stocks in Seoul closed weaker on concerns over the surging won.