NEW YORK (CNN/Money) - U.S. stock markets tumbled Wednesday, losing ground for the first session in four as investors assessed recent gains and found few reasons to build upon them, particularly heading into a long weekend.

The Nasdaq composite (down 32.92 to 1990.61, Charts) lost 1.6 percent, the Standard & Poor's 500 (down 10.85 to 1131.33, Charts) index lost nearly 1 percent, and the Dow Jones industrial average (down 64.08 to 10368.44, Charts) lost 0.6 percent.

"I think it's basically a case of no interest on either the buy or the sell side," said Ned Riley, chief investment strategist at State Street Global Advisors. "People have already emotionally prepared for the long weekend, and they don't want to carry much ahead of it."

U.S. financial markets will be closed Friday in observance of a national day of mourning for former President Ronald Reagan, who died Saturday.

Federal Reserve Chairman Alan Greenspan's Senate nomination hearing -- originally scheduled for Thursday -- has been postponed until next week. Friday's producer prices report has been delayed as well, leaving few economic reports to sway markets before the long weekend.

Thursday's one economic report of note is the weekly jobless claims report. New claims are expected to have fallen to 335,000 last week from 339,000 the previous week.

Retailers are apt to be front and center Thursday. After the bell Wednesday, Target (TGT: Research, Estimates) said it was selling its Marshall Field's unit and nine stories in the Minneapolis-St. Paul area currently operated as Mervyn's stores to May Department Stores (MAY: Research, Estimates) for around $3.2 billion in cash.

Separately, Target also said it plans to buy back $3 billion of its common stock, a move that often boosts a company's stock price as it is usually viewed as a sign of corporate confidence.

"Volume is likely to remain light the rest of this week, and I would expect the market to remain volatile Thursday,"said Peter Cardillo, chief market analyst at S.W. Bach & Co. "But there's good news out there, and over the next few weeks, I think we'll remain in this trading range but edge up toward the higher end of it."

The analysts say that looking out beyond this week, the market will be supported by the fact that the U.N. Security Council this week unanimously approved the U.N. resolution on Iraq that allows for the June 30 transfer of power.

"I actually think that the markets will be stronger going into the FOMC meeting June 30 and the handoff to the Iraqi council, only because these things are certain now," Riley added.

A three-session relief rally had pushed the major indexes to multi-week highs by the close Tuesday. But with little impetus to continue buying, investors backed off Wednesday. Some also showed caution on the heels of Tuesday's statement by Fed chief Alan Greenspan that the central bank could be more aggressive in raising interest rates if it sees stronger signs of inflation.

Interest rate sensitive stocks such as Caterpillar (CAT: down $1.72 to $75.40, Research, Estimates) declined.

Oil prices had tumbled through the morning, but reversed course in the afternoon, moving higher even after the U.S. Department of Energy released a report showing that oil reserves increased in the last month. NYMEX light sweet crude oil futures added 26 cents to settle at $37.54.

However, oil stocks remained weak throughout the session.

Among other movers, OmniVision Technologies (OVTI: down $7.84 to $17.63, Research, Estimates) tumbled nearly 31 percent in unusually active Nasdaq trade. The specialty chipmaker delayed the release of its fiscal fourth-quarter earnings and said it may have to restate some results from 2003 and 2004.

Shares of Coca-Cola (KO: down $0.85 to $51.76, Research, Estimates) fell 1.6 percent and led the Dow's decliners after the company's president, Steve Heyer, said he was stepping down "by mutual agreement." The resignation was expected after Heyer was passed over to replace the outgoing CEO.

Shares of clothing retailer Tommy Hilfiger (TOM: down $1.51 to $13.99, Research, Estimates) fell nearly 10 percent. The company warned Wednesday that it will post a fiscal first-quarter earnings-per-share loss, when analysts currently expect a profit, and that revenue for fiscal 2005 will decline by a steeper percentage than previously thought, all because of weaker wholesale and European business. The warning overshadowed the company's higher fiscal fourth-quarter earnings report.

Biotech Genentech (DNA: down $4.24 to $52.30, Research, Estimates) lost 7.5 percent in active New York Stock Exchange trade after Bernstein downgraded it to "market perform" from "outperform."

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Among the gainers, always active security firm IPIX (IPIX: up $1.12 to $12.03, Research, Estimates) rallied more than 10 percent and topped the Nasdaq's actives list after announcing that its video surveillance systems are being used at the G8 summit in Georgia this week.

In addition, Dow telecoms SBC Communications (SBC: up $0.28 to $24.62, Research, Estimates) and Verizon Communications (VZ: up $0.31 to $35.86, Research, Estimates) both added about 1 percent after significant midday news for the sector. The U.S. government has opted not to appeal the ruling that threw out the FCC's requirement that dominant local telephone carriers lease their networks at lower rates, bad news for former Dow telecom AT&T (T: down $0.39 to $16.56, Research, Estimates).

Market breadth was negative and trading volume was light. Some 1.27 billion shares traded on the New York Stock Exchange, with decliners outpacing advancers by three to one. On the Nasdaq, the loser-to-gainer ratio was 11 to four as 1.51 billion shares changed hands.

Among other commodities, COMEX gold fell $6.60 to settle at $385.20 an ounce. Gold tumbled along with other dollar-traded commodities, as the greenback rallied on Greenspan's comments about interest rates.

Treasury prices fell, pushing the 10-year note yield up to 4.80 percent from 4.76 percent late Tuesday. Bond prices and yields move in opposite directions. The dollar rallied versus the euro and was also higher versus the yen.