Continued weakness in the dollar and surging oil prices prompted a round of profit-taking Wednesday, pushing stocks slightly lower in light holiday-week trading. Losses remained minimal, however, giving investors hope that Wall Street's yearend rally would still extend into January.

The Dow Jones industrial average (search) was down 25.35 points, or 0.23 percent, to end at 10,829.19. The Standard & Poor's 500 Index (search) dipped just 0.09 of a point, or 0.01 percent, to close at 1,213.45. The technology-laced Nasdaq Composite Index (search) inched down 0.19 of a point, or 0.01 percent, to finish at 2,177.00.

The lackluster session came a day after all three indexes hit fresh highs for the year.

Oil prices rose for a second day in a row after car bombs exploded in Saudi Arabia's capital and the U.S. government reported another drop in winter heating fuel stockpiles. Light crude for February delivery rose $1.87, or 4.4 percent, to settle at $43.64 per barrel on the New York Mercantile Exchange (search).

Higher oil prices weigh on stocks because they can depress corporate profits and consumer spending.

"We got the reports of explosions in Saudi Arabia, and that, on top of the drawdown in oil inventories, saw a big jump in oil prices," said John Caldwell, chief investment strategist at McDonald Financial Group, part of Key Corp. "That took a bit of the wind out of the sails of the market."

The dollar fell to its fifth straight record low against the euro — good news, in the short term, for American exporters and tourism, but problematic for inflation should the dollar fail to gain ground in the long term.

"I think you're definitely seeing some money being moved off the table today," said Steve Neimeth, senior vice president and portfolio manager at AIG SunAmerica. "But the economic data we've seen over the past month has been positive, and there's a lot of reasons to stay optimistic."

Boeing (BA) came under pressure after news that China will not approve new aircraft purchases next year in an effort to curb overheated growth in the airline sector. The airplane manufacturer, currently discussing deals with China to sell the country its Boeing 7E7 wide-body jet, told Reuters that the country's decision to freeze orders in 2005 would have no impact on its ongoing talks. But the Dow component's stock fell 2.2 percent, or $1.18, to $52.07.

United Technologies Corp. (UTX), which supplies Boeing with jet engines, also weighed on the Dow, with its shares falling 0.7 percent, or 78 cents, to $103.96 while Honeywell International Inc. (HON), the world biggest manufacturer of cockpit electronics, fell 1 percent, or 37 cents, to $35.70.

Meanwhile, defense contractor Lockheed Martin Corp. (LMT), an S&P 500 constituent, fell 2.7 percent, or $1.51, to $55.25. That followed U.S. defense officials saying that The Pentagon was planning deep reductions in spending on the costliest fighter jet ever built, the Air Force's F/A-22 Raptor. Lockheed makes F/A-22 fighter jets.

"These are the normal risks of holding these groups — this is why they're cyclicals — defense spending comes and goes and shifts around a little bit," Caldwell said.

"Boeing is weighing on the market, and there is some window dressing happening with money managers picking up winners and selling losers," said Milton Ezrati, senior economic strategist at Lord Abbett & Co.

Wall Street received some good news from the National Association of Realtors, which said sales of existing homes totaled 6.94 million units in November, up from 6.76 million in October and far surpassing economists' expectations of 6.75 million homes. The figures made up for a disappointing report on new home construction last week, which fell far short of expectations.

Time Warner Inc. (TWX) fell 13 cents to $19.42 after The Wall Street Journal reported the company was in talks with Sprint Corp. to offer a Time Warner-branded cellular service on a trial basis in 2005. Sprint climbed 2 cents to $24.85 on the news.

Fannie Mae's (FNM) shares fell 19 cents to $69.65. The company's chief executive and chief financial officer recently stepped down under fire. Fannie Mae said some of the preferred stock would be convertible into common shares.

Oracle Corp. (ORCL) said it now has shareholder control over PeopleSoft Corp. (PSFT), with 75 percent of the latter company's outstanding shares now tendered to Oracle, which has also assumed control of PeopleSoft's board. Oracle's takeover is expected to close in January. Oracle slipped 12 cents to $13.72, while PeopleSoft gained 8 cents to $26.48.

Proxim Corp. (PROX) tumbled 84 cents, or 17.1 percent, to $4.10 after the wireless networking equipment maker lowered its fourth-quarter profit forecasts. Proxim blamed a slowdown in wireless carrier purchasing as well as pricing pressure from rival Cisco Systems Inc (CSCO).

Biotech company Genzyme Corp. (GNZM) said the Food and Drug Administration has given its approval to the company's leukemia drug Clolar, aimed at treating children in whom previous leukemia treatments have failed. Genzyme rose 63 cents to $58.16.

Teen-focused clothier Wet Seal Inc. (WTSLA) was up a penny at $2.10 after the struggling company said it will close 150 underperforming stores and cut 2,000 jobs in an attempt to shore up its bottom line.

Trading remained light, with desks sparsely populated as many traders were away on vacation.

Around 926 million shares changed hands on the New York Stock Exchange, far below the 1.4 billion daily average for last year. About 1.5 billion shares were traded on Nasdaq, below the 1.69 billion daily average last year.

Advancers outnumbered decliners on the NYSE by about 9 to 7, while decliners outnumbered advancers by about 8 to 7 on Nasdaq.

The Russell 2000 index of smaller companies was down 1.23, or 0.2 percent, at 653.34.

Overseas, Japan's Nikkei stock average fell 0.37 percent. In Europe, Britain's FTSE 100 closed up 0.45 percent, France's CAC-40 rose 0.06 percent for the session, and Germany's DAX index lost 0.33 percent.

Reuters and the Associated Press contributed to this report.