NEW YORK (CNNMoney.com) - Blue chips slipped Thursday on worries about inflation amid Treasury bond yields near 4-year highs, gold near a 25-year high and oil prices near $68 a barrel.

Friday, the focus turns to the March employment report.

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The Dow Jones industrial average (down 23.05 to 11,216.50, Charts) and the broader Standard & Poor's 500 (down 2.52 to 1,309.04, Charts) index both lost around 0.2 percent. But the Nasdaq composite (up 1.42 to 2,361.17, Charts) ended barely higher, squeaking out a fresh five-year high.

Employers are expected to have added 190,000 to their payrolls in March after adding 243,000 in February, according to a consensus of economists surveyed by Briefing.com. The unemployment rate, generated by a separate survey, is expected to hold steady at 4.8 percent.

Average hourly earnings, the report's inflation component, is expected to have risen 0.3 percent, as it did in February.

The report will set the tone for the morning.

Research in Motion (Research) was among the stocks likely to be active Friday. The maker of the Blackberry wireless device issued current-quarter forecasts for earnings per share, revenue and subscriber growth that is short of estimates. That overshadowed the company's in-line earnings report. Shares fell 4 percent in extended-hours trading.

Starbucks (Research) gained 2 percent in extended-hours trading after reporting a stronger than expected jump in March same-store sales, or sales at stores open a year or more.

Thursday's inflationary factors -- higher bond yields, oil prices and gold -- kept the major gauges in a tight range throughout the afternoon, following some morning weakness.

Jitters about Friday's monthly employment report and Merck's latest Vioxx setback were factors too.

"Investors are taking a short-term focus right now that is very data dependent," said Russell Lundeberg, Jr., chief investment officer at Barrett Capital Management.

He said that since Federal Reserve chief Ben Bernanke has made it clear that the central bank's policy will be data dependent going forward, the stock market is following suit. So Thursday's inflationary pressure was putting a restraint on the market.

"From a big picture perspective, we are seeing a strong economy," Lundeberg said. "We've seen high energy and commodity prices for a long time, and it hasn't had a substantial impact on the core rate of inflation."

The major stock gauges briefly fell to session lows at midday on news about President Bush.

Court documents made public Thursday said that Vice President Dick Cheney's former chief of staff told prosecutors that President Bush authorized the leak of sensitive intelligence information on Iraq. The documents, first reported by news wire services, said that I. Lewis Libby, Cheney's former top aide, testified about this to the grand jury investigating the Valerie Plame leak.

Also impacting trade Thursday: a retreat after Wednesday's big rally that pushed the Nasdaq to its best close in five years and the S&P 500 to its best close in nearly five years.

Still, the market was holding up pretty well considering the negatives, said Joseph Saluzzi, co-head of equity trading at Themis Trading. Six months ago, oil prices near $68 a barrel and a weak report on March retail sales would have probably knocked stocks much lower, he said.

"At this point, the dips (in the market) are positive," Saluzzi said. "Investors are using them as a buying opportunity."

U.S. light crude oil for May delivery rose 87 cents to settle at $67.94 a barrel on the New York Mercantile Exchange.

Treasury prices fell and yields rose after a surprising drop in weekly jobless claims. The sell-off pushed the yield on the benchmark 10-year note up to around 4.89 percent from 4.84 percent late Wednesday. Earlier in the session, the note yield touched an almost four-year high, matching the above 4.90 percent hit Monday.

COMEX gold for June delivery rose $7.20 to settle at $599.70 an ounce. Earlier in the session, the price had risen to $600 an ounce, a new 25-year high.

Dow component Merck (down $1.15 to $34.84, Research) sank 3.2 percent after the latest verdict regarding its withdrawn painkiller Vioxx.

A New Jersey jury late Wednesday found that the drugmaker was liable in the heart attack of one man who took the painkiller and awarded him $4.5 million. The jury ruled that Merck was not liable in the heart attack of a second man who took Vioxx. (Full story.)

Fellow Dow component 3M (up $3.92 to $81.38, Research) jumped 5.1 percent after boosting its first-quarter earnings per share and revenue forecast. The diversified manufacturer attributed the strong quarter to strength in a variety of its businesses.

3M is considered a bellwether for the economy because of the breadth of its products, from Scotch tape to Thinsulate insulation.

However, many of the Dow components weakened, with 23 out of 30 issues falling, led by General Motors (down $0.36 to $19.55, Research), AT&T (down $0.31 to $26.45, Research) and Home Depot (down $0.51 to $42.14, Research).

Among other movers, home builders slipped across the board, sending the Dow Jones U.S. Home Construction (down $10.78 to $910.92, Research) index down 1.2 percent.

Biotechs were also weaker, continuing the recent selloff in the sector. The Amex Biotechnology (Charts) index fell 2.3 percent.

A number of retailers reported disappointing March sales Thursday morning, blaming the shift of the Easter holiday to April from March. But the weak results didn't have much impact on retail stocks, and that seemed to helped underpin the broader market.

Teen apparel makers Aeropostale (up $1.85 to $30.70, Research) and American Eagle Outfitters (up $1.19 to $30.70, Research) both posted weaker-than-expected results for stores open a year or more, but shares of both companies rose.

On the upside, Costco (up $1.45 to $56.59, Research) said sales rose 7 percent in the month, lifting its stock about 2.6 percent.

Apple Computer (up $4.03 to $71.24, Research) rose for a second session on news that it's introducing software allowing new Macintosh computers using Intel chips to run the Windows operating system. The stock jumped nearly 10 percent Wednesday.

Market breadth was negative. On the New York Stock Exchange, losers topped winners nine to seven on volume of 1.57 billion shares. On the Nasdaq, decliners narrowly topped advancers on volume of nearly 2.18 billion shares.

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