NEW YORK (CNNMoney.com) - Worries about rising interest rates sapped stocks Thursday, with the Dow industrials retreating from near five-year highs amid a jump in home sales, higher oil prices and higher bond yields.

The Dow Jones industrial average (down 47.14 to 11,270.29, Charts) lost about 0.4 percent.

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The Nasdaq composite (down 3.20 to 2,300.15, Charts) and the broader Standard & Poor's 500 (down 3.37 to 1,301.67, Charts) index both saw smaller declines.

As of 6:00 p.m. ET, Nasdaq and S&P futures point to a higher open for stocks Friday, when fair value is taken into account, due in part to news that Google will be added to the Standard & Poor's 500 after the close of trade on March 31.

Google will replace Burlington Resources (Research), which is being bought by ConocoPhillips (Research). Shares of Google (Research) jumped more than 8 percent after-hours.

Cephalon (Research) is also likely to be active Friday, after an FDA advisory panel said late Thursday that the drugmaker's Provigil is not safe enough to be marketed for attention deficit hyperactivity disorder in children and teenagers. Earlier, the panel had said that the drug was effective.

Following the news, Cephalon cut its 2006 sales guidance. (Full story).

Investors will also take in reports on durable goods orders and new home sales Friday.

Stocks began Thursday's session in negative territory following a disappointing earnings outlook from Adobe Systems. Equities sank even lower after a bullish housing report and a jump in oil prices sparked worries about pricing pressures in the world's largest economy.

Bond prices slipped, raising corresponding yields, and oil prices jumped 3.5 percent in New York. Gold prices edged lower.

In addition to the day's news, the stock market may be primed for some declines regardless, due to its recent advances. The Dow rose to its highest level in nearly five years Wednesday as part of a broad advance, and the S&P is not far from five-year highs.

"A decline at this point is not unexpected," said Paul Rabbit, president at Rabbit Capital Management. "We've pushed into territory where the market is only expecting the best-case scenario, so we're vulnerable to headline news."

On Thursday, those headlines included the read on housing and the jump in oil prices.

Existing home sales posted their biggest jump in two years. That may have revived worries about the pace of economic growth and higher rates.

The concern is that if housing remains strong and the economy is more robust than it seems, that may lead to pricing pressure and a Fed that would raise rates more aggressively than investors have been expecting.

Investors are particularly rate-sensitive ahead of next week's Federal Reserve meeting, at which the central bank is expected to boost its key short-term interest rate to 4.75 percent from 4.5 percent.

Treasury prices fell after the report, boosting the yield on the benchmark 10-year note to 4.73 percent from around 4.70 percent late Wednesday. Treasury prices and yields move in opposite directions.

Adding to inflationary woes was a jump in oil prices.

U.S. light crude oil for May delivery jumped $2.14 to settle at $63.91 a barrel on the New York Mercantile Exchange, a jump of roughly 3.5 percent. The gain was sparked by supply worries after Eni, an Italian oil firm, said it would not honor contracts on its Nigerian exports.

COMEX gold for April delivery fell 90 cents to settle at $550.80 an ounce.

Market breadth was mixed. On the New York Stock Exchange, losers edged winners by a narrow margin on volume of 1.45 billion shares. On the Nasdaq, advancers edged decliners as nearly 2 billion shares changed hands.

A variety of blue chips declined, with 22 out of 30 Dow components falling.

All four of the Dow's tech components fell, with Hewlett-Packard (down $0.36 to $33.00, Research), Intel (down $0.28 to $19.70, Research), Microsoft (down $0.30 to $26.85, Research) and IBM (down $1.25 to $83.20, Research) all losing at least 1 percent.

Other decliners among the Dow industrials included General Electric (down $0.41 to $34.12, Research) and Procter & Gamble (down $0.84 to $58.65, Research).

General Motors (down $0.01 to $22.00, Research) said it finished the sale of a majority stake in its GMAC Commercial Holding Corp., which will earn it $9 billion in cash. The stock see-sawed on the news all day before ending the session near unchanged.

On Wednesday, the troubled automaker said it reached an early retirement deal with bankrupt parts supplier Delphi (Research) and its auto workers union.

Adobe Systems (down $0.29 to $36.33, Research) warned late Wednesday that its current-quarter earnings and revenue could miss forecasts. That overshadowed the company's otherwise strong fiscal first-quarter results.

Adobe shares ended modestly lower, after having fallen 3 percent in the morning.

A number of other software makers slid too, sending the Goldman Sachs Software (Charts) index down by 0.7 percent.

Providing some strength for technology, was Yahoo! The Internet search engine was upgraded by UBS to "buy" from "neutral," due to a variety of positive near-term factors, Reuters reported. Yahoo! (up $1.08 to $31.83, Research) shares gained over 3 percent.

Tech also got a lift from Jabil Circuits (up $4.51 to $42.75, Research), which jumped nearly 12 percent following its earnings report and forecast late Wednesday. The manufacturer of circuit boards and computer components reported a jump in second-quarter earnings and profit and forecasts bullish third-quarter results.

What was bad for the overall market was still good for the underlying stocks, at least in terms of oil and housing.

The spike in oil prices dragged on overall sentiment, but gave a boost to oil stocks. The Philadelphia Oil Service (Charts) sector index jumped 2.4 percent.

Although the strong housing report sparked overall inflation worries, it boosted home builder stocks. The Dow Jones U.S. Home Construction (up $31.24 to $893.58, Research) index added 3.6 percent.

Strength in oil and housing stocks helped offset weakness in the rest of the market.

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