Wall Street's three-day winning streak came to an end Thursday as investors, taking a second look at Tuesday's election results, questioned whether a Democratic Congress would be friendly to business.

The losing session, which was also influenced by rising oil prices and a drop in consumer confidence, was to be expected after three days of gains that included a new closing high Wednesday for the Dow Jones industrials. Investors had driven stocks broadly higher this week on optimism that Democrats taking control of Congress would cause political gridlock that would be favorable to businesses.

But after more time to mull over the election, investors are starting to become concerned about an "anti-business stance" among Democrats in Washington, said John O'Donoghue, co-head of equities at Cowen & Co.

"The market's been looking for a reason to go to the downside, and a change in Washington is as good an excuse as any," O'Donoghue said.

Meanwhile, U.S. consumers' confidence weakened slightly in early November but stayed near a 15-month high, according to the University of Michigan. That data overshadowed good news from the Commerce Department that America's trade deficit showed a sharp improvement in September, and a report from the Labor Department that said the number of newly laid off workers had a bigger than expected drop last week.

The Dow fell 73.24, or 0.60 percent, to 12,103.30. The Dow reached a new closing high of 12,176.54 on Wednesday.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 7.39, or 0.53 percent, to 1,378.33, while the Nasdaq composite index fell 8.93, or 0.37 percent, to 2,376.01. The technology-laden Nasdaq was higher earlier in the day on strong earnings results from Cisco Systems Inc.

Bonds edged higher, with the yield on the benchmark 10-year Treasury note at 4.63 percent, down from 4.64 percent Wednesday. The dollar was mostly higher against other major currencies, while gold prices rose.

Crude prices extended their gains after the U.S. government reported gasoline inventories fell last week. A barrel of light sweet crude soared $1.33 to $61.16.

Going forward, investors will be relying on developments in Washington and clues to the country's economic health now that third-quarter earnings reports are largely in.

"The market's going to be on guard for any signs that the (economic) soft landing is going to be harder than people are anticipating," said John Caldwell, chief investment strategist for McDonald Financial Group, part of Cleveland-based KeyCorp.

Stocks have been on a tear in recent months, but last week, they cooled on worries that corporate profits may not hold up in a slowing economy. Prior to Monday's 119-point gain in the Dow, the market's best-known index closed lower for six straight sessions for the first time since June 2005.

Cisco (CSCO) surged $1.61, or 6.4 percent, to $26.71. The world's biggest networking equipment maker said its acquisition of Scientific-Atlanta Inc. pushed profit up 28 percent. UBS also upgraded the stock on the results, and predicted strong future growth.

Hewlett-Packard Co. (HPQ) also helped drive technology stocks after Goldman Sachs lifted the computer and printer maker's 12-month price target to $46 from $42.50. Shares rose 68 cents, or 1.8 percent, to $39.56.

Merck & Co. (MRK) fell $1.46, or 3.3 percent, to $42.88, after the pharmaceutical company said liabilities from four tax disputes in the U.S. and Canada could total $5.58 billion. The drug maker faces tens of thousands of lawsuits over its withdrawn painkiller Vioxx.

J.C. Penney Corp. (JCP) posted profit that surpassed Wall Street projections, and raised its full-year financial forecast. Shares of the retailer rose $1.35, or 1.7 percent, to $79.55.

Viacom Inc. (VIA) fell after the entertainment conglomerate reported a 16 percent slide in profit for the third quarter. The company also announced Chief Financial Officer Michael J. Dolan will step down at the end of the year. Shares fell $1.24, or 3.1 percent, to $38.43.

Declining issues outnumbered advancers by nearly 4 to 3 on the New York Stock Exchange, where volume came to 1.86 billion shares compared to 1.61 billion at the same point on Wednesday.

The Russell 2000 index of smaller companies fell 7.78, or 1.01 percent, to 762.06.

Overseas, Japan's Nikkei stock average closed lower by 0.11 percent. At the close, Britain's FTSE 100 closed down -0.12 percent, Germany's DAX index closed up 0.15 percent, and France's CAC-40 closed up 0.21 percent.