Stocks fell Friday, weighed down by higher crude oil prices, disappointing first-quarter profits from consumer-focused companies like Costco and a report that North Korea could be preparing for a nuclear weapons test.

The Dow Jones industrial average (search) was down 60.89 points, or 0.60 percent, to end at 10,157.71. The Standard & Poor's 500 Index (search) was down 7.83 points, or 0.68 percent, to close at 1,152.12. The Nasdaq Composite Index (search) was down 30.22 points, or 1.54 percent, to finish at 1,932.19.

The decline came a day after a major rally by all three stock indexes and ended a tumultuous week for investors.

On Wednesday, the Dow was a hairsbreadth from ducking under the psychologically important 10,000 level. But on Thursday, the Dow surged by its largest amount in two years.

For the week, the Dow ended up 0.70 percent, the S&P 500 edged up 0.83 percent, and Nasdaq was up 1.26 percent.

"The market's tired," said Scott Lynch, managing director of U.S. trading at CSFB. "The market opened down and stayed in a downish mode for most of the day. It fought to try and get back, but there was no real catalyst to take the market to the upside."

U.S. stocks extended their slide late in the session, after the Wall Street Journal reported on its Web site that the United States has warned China "quietly that North Korea could be preparing for a nuclear weapons test."

"The market was weak before and this just added to it. It's another piece of bad news," said Elliot Spar, market strategist at Ryan Beck & Co.

However, the stock indexes ended off their lows for the day. The North Korea report sparked a sell-off, "but once the market digested the headlines, people felt less anxious about the news," said Brian Williamson, vice president, equity trading, at The Boston Co. Asset Management.

A senior administration officer later said the United States has not seen certain evidence that North Korea is preparing for a nuclear weapons test, although it has seen "interesting" activity.

Among stocks falling was Costco (COST), the largest U.S. warehouse club operator, down $3.85 at $40.17 after it said third- and fourth-quarter earnings would likely miss Wall Street's forecasts.

The market flailed wildly over the last eight sessions, with the Dow losing 374 points last week, Much of the selling was attributed to fears about inflation, which were exacerbated by the Labor Department's report on consumer prices last week, and underscored by the Federal Reserve's "Beige Book" survey — not generally considered a compelling data point. Analysts said the recent trading underscores the depth of investors' anxiety, even in the face of generally positive earnings news.

"It's a really strange period of market action. There's no conviction," John Caldwell, chief investment strategist for McDonald Financial Group in Cleveland. "That's why people are grasping at second- and third-level economic data, and rumors about geopolitical issues. ... Bond yields are all over the place, oil trades like it's a tech stock in 1999 ... Investors are nervous."

Adding to the concern over consumer spending, oil prices continued their rise, with a barrel of light crude settling at $55.39, up $1.319, on the New York Mercantile Exchange (search).

Google (GOOG) surged 5.7 percent, or $11.59, to $215.81, as it continued to pleasantly surprise investors with its latest earnings report. The online search company surpassed Wall Street profit forecast by 37 cents per share in the first quarter, and the stock reached a new high in the first minutes of trading.

Euphoria over Google was overshadowed, however, by earnings gloom from the consumer sector.

Costco warned that gasoline sales were eroding its margins despite steady sales in other areas. Slower sales have forced Maytag (MYG) to ramp up its cost-cutting plans. The appliance maker plunged 27.9 percent, or $4.21, to $10.89, after reporting a steep slide in first quarter profits, missing Wall Street profit forecasts by 10 cents per share. Maytag also reduced its earnings forecasts for the year.

Eastman Kodak Co. (EK) also saw a rough quarter as the world's biggest film producer continued on its bumpy transition to digital imaging and photography. The company swung to a loss for the quarter and missed analysts' forecasts by 30 cents per share after one-time charges. Kodak tumbled 9.4 percent, or $2.85, to $27.66.

Shares of the Nasdaq Stock Market Inc. (NDAQ) surged 26 percent, or $2.78 to $13.43 after the company and a consortium of investors said they had reached an agreement to purchase Instinet Group Inc. from its majority owner, Reuters Group Plc (RTRSY) for $1.88 billion. Instinet fell 9 percent, or 51 cents to $5.19.

On Wednesday, the New York Stock Exchange struck a deal to merge with electronic market Archipelago Holdings Inc. (AX).

In merger news, MCI Inc. (MCIP) climbed 19 cents to $26.69 after Qwest Communications International Inc. (Q) continued its tenacious pursuit of its rival, upping its bid to $30 per share, or $9.7 billion. MCI had already agreed to a $23.10 per share, or $7.6 billion, bid from Verizon Communications Inc. (VZ). Qwest shed 6 cents to $3.55, while Verizon was down 20 cents at $34.06.

Biotechnology company Amgen Inc. (AMGN) posted sales that fell shy of Wall Street estimates. Amgen shares fell nearly 1 percent to $58.71.

Shares of online DVD rental company Netflix Inc. (NFLX) fell nearly 8 percent to $11.15 after it reported a quarterly loss stemming from higher marketing spending.

Trading was moderate, with 1.68 billion shares changing hands on the New York Stock Exchange, just above the 1.46 billion daily average for last year. About 1.85 billion shares were traded on Nasdaq, slightly above the 1.81 billion daily average last year

The number of declining shares outpaced those that rose by a ratio of about 5 to 3 on the NYSE. Decliners led advancers by about 7 to 3 on Nasdaq.

The Russell 2000 index of smaller companies was down 9.45, or 1.58 percent, at 589.53.

Overseas, Japan's Nikkei stock average rose 0.56 percent. In Europe, Britain's FTSE 100 was up 0.62 percent, Germany's DAX index gained 0.70 percent, and France's CAC-40 climbed 0.74 percent.

Reuters and the Associated Press contributed to this report.