Stocks ended lower Wednesday, extending Wall Street's slump into a third session, as renewed concerns about inflation and technology shares were hurt by Xilinx's (XLNX) reduced revenue outlook.

The Dow Jones industrial average (search) lost 32.95 points, or 0.31 percent, to 10,597.83. The Nasdaq Composite Index (search) fell 16.62 points, or 0.79 percent, at 2,091.24, its fourth loss in a row, the longest streak of declines since August 2004. The Standard & Poor 500 Index (search) fell 4.31 points, or 0.36 percent, at 1,183.74, another four-day losing streak.

Investors were still digesting the latest news from the Federal Reserve's (search) Open Market Committee, which sent stocks tumbling Tuesday when it released the minutes of its Dec. 14 meeting. Several members of the policy making group expressed concerns about inflation, citing a drop in productivity growth, a weakening dollar and high oil prices, and hinted that interest rates were likely to be tightened more aggressively to deal with those issues.

"There's a lot of indecisiveness today," said Brian Williamson, an equity trader at The Boston Company Asset Management. "Sellers got washed out late yesterday and today, and the market found a level where it had been trading a month or so ago and it's holding its ground. But because of what happened yesterday, you're not seeing that much conviction in the market."

The market's action during the first few trading days of the year was somewhat unusual, particularly since 2004 ended on such a positive note, and with such high expectations for January. Still, after the kind of rally investors enjoyed during the last days of December, some pullback was to be expected, said Arthur Hogan, chief market analyst at Jefferies & Co.

"Yes, we expect earnings to be good, and yes, we expect good things out of corporate America, but we had a significant run-up and now we have to consolidate, and some folks are taking some profits," Hogan said. "I wouldn't write off 2005, I wouldn't write off January, but I'd say that's what's behind the cautious attitude of investors."

Crude futures fell after the U.S. government reported sizable increases in gasoline and heating oil inventories. Light, sweet crude for February delivery shed 52 cents to $43.39 a barrel on the New York Mercantile Exchange (search).

Lower oil prices generally help stocks due to their beneficial impact on corporate profits and consumer spending. U.S. light crude fell 56 cents to $43.39 a barrel.

Xilinx, a maker of programmable microchips, shed 90 cents to $27.54 after lowering its third-quarter sales forecast, saying it expects an 11 percent to 12 percent decline due to lower bookings and shipments. Siebel Systems Inc. (SEBL)shed 27 cents to $9.61 despite saying it expects fourth-quarter results to beat Wall Street expectations based on improvements in profitability and all revenue categories.

"Chip makers are hurting the Nasdaq, while oil is trading off on the inventory data," said Brian Williamson, vice president at The Boston Co. Asset Management.

Meanwhile, growth in the huge U.S. services sector rose in December, although employment declined slightly, according to a survey published on Wednesday.

The Institute for Supply Management's (search) non-manufacturing index rose to 63.1 in December from 61.3 in November, above Wall Street median estimates of 61.0.

AIG (AIG) rose 1.6 percent to $67.35 after the insurer increased its quarterly dividend 66.7 percent, citing company growth in recent years.

Delta Air Lines Inc. (DAL) was down 51 cents, or 7 percent, at $6.80 after the carrier said it was cutting domestic fares by up to 50 percent and scrapping its unpopular Saturday-stay requirement in a move to lure back customers. The airline's SimpliFares plan comes as Delta fights to stay out of bankruptcy.

Among retailers, Nordstrom Inc. (JWN) was up $1.44 at $47.06 after saying December sales rose a better than expected 9.3 percent. Despite the strong sales, company executives said in a conference call they were comfortable with their current forecast for the fourth-quarter.

Circuit City Stores Inc. (CC) slid 8.4 percent, or $1.25, to $13.71, after reporting disappointing sales for December. The company said its consumer electronics stores were operating efficiently, but holiday customer traffic was down.

Trading was active, with 1.7 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 2.4 billion shares were traded on Nasdaq, well above the 1.81 billion daily average last year.

The number of stocks falling on both the NYSE and Nasdaq outnumbered those rising by about 2-to-1.

The Russell 2000 index, which tracks smaller company stocks, was down 11.06, or 1.76 percent, at 617.48.

Overseas, Japan's Nikkei stock average sagged 0.70 percent. In Europe, France's CAC-40 declined 0.88 percent, Britain's FTSE 100 fell 0.85 percent and Germany's DAX index lost 0.75 percent.

Reuters and the Associated Press contributed to this report.