Updated from 4:06 p.m. ESTStocks closed in the red Wednesday with the Nasdaq leading the fall, as a clutch of mostly positive earnings and economic news couldn't relieve investors' recent jitters. The Dow Jones Industrial Average fell 88.82 points, or 0.84%, to 10,539.97, the S&P 500 slid 11.35 points, or 0.95%, to 1184.63; and the Nasdaq fell 32.45 points, or 1.54%, to 2073.59, after the major indices posted their first back-to-back winning sessions of the year yesterday. The tech index had just regained the 2100 level Tuesday for the first time since Jan. 4 but is now back near its 2005 low. Volume on the NYSE was 1.50 billion shares, with decliners beating advancers by a ratio of 3 to 2. Volume on the Nasdaq was 2.22 billion shares, with decliners outpacing advancers 11 to 5. In other markets, the 10-year Treasury note was up 2/32 in price to yield 4.18%, while the dollar was higher against the yen and euro. Crude oil prices eased after reversing a rally Tuesday that took the price of a barrel over $49 for the first time in seven weeks. The benchmark crude contract closed down 83 cents to end at $47.55 a barrel ahead of an Energy Department report that is expected to show a 300,000-barrel build in distillate stocks and a 900,000-barrel build in crude and gas stocks. "Day to day, the trend has been iffy at best, as far as trying to recover from the first two weeks of the year," said Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "The market is certainly aware and concerned about what more aggressive Fed behavior means. I think the market is under a cloud of concern about what the Fed is going to do, and how it will affect growth in 2005. It's another reaction to an unknown the market has to deal with." The government said consumer prices fell 0.1% in December, led by a 1.8% drop in energy prices. The core index, which excludes the energy-price drop, rose 0.2%, matching analysts' expectations. The CPI increased 3.3% in 2004, the largest increase since 3.4% in 2000. The Federal Reserve released its December-January beige book, which said the economy continued to post steady growth during the period. The Fed added that inflationary pressures remained largely in check, with price inflation "relatively steady in recent weeks." The report also said labor markets were firmer in late 2004, but that wage pressures generally continued to be modest. "The beige book report was consistent with the previous reports and doesn't indicate any economic malaise," said Peter Cardillo, chief market analyst with S.W. Bach & Co. "The market here is certainly not responding to some of the better reports, focusing on negative earnings reports instead. The fear factor is beginning to build up again that the Fed will be more hawkish in the coming months, and it's got the market on the skids." In other economic releases, jobless claims fell 48,000 to 319,000 last week, the largest decline in three years, while housing starts rose 10.9% to an annual pace of 2 million units. November's starts were revised higher to 1.81 million units. Corporate America ladled out a huge helping of technology results after the bell Tuesday, with most of the companies reporting better-than-expected earnings. IBM ( IBM), Motorola ( MOT) and Yahoo! ( YHOO) churned out combined fourth-quarter profits from continuing operations of more than $4.1 billion, while a handful of aggressively traded smaller firms, including Juniper ( JNPR), also posted impressive numbers. "I'm a little surprised at the action, considering the background was favorable," said Larry Wachtel, senior market analyst with Wachovia Securities. "Earnings were good but not great. Still, I'm puzzled by the lack of response. The psychology of caution from the first two weeks must still be hanging around." At IBM, fourth-quarter earnings were $3.1 billion, or $1.81 a share, up from $2.7 billion, or $1.56 a share, last year. Revenue rose 7% from a year ago to $27.7 billion. Analysts had been calling for earnings of $1.76 a share on revenue of $27.5 billion. The company forecast 2005 revenue growth of 6%, a percentage point higher than expected. The stock fell $1.80, or 1.9%, to $93.10.