NEW YORK (CNNMoney.com) - Stocks fell for the third straight session Wednesday after a leading indicator on manufacturing activity came in weaker than expected and bird flu worries rattled investors.

The Dow Jones industrial average (down 26.98 to 11,098.35, Charts) lost 0.1 percent and the Standard & Poor's 500 index (down 0.81 to 1,255.77, Charts) fell 0.1 percent after the market open.

The Nasdaq composite (up 0.17 to 2,158.93, Charts) posted modest gains.

Stocks have sold off the past two weeks as inflation worries and concerns about economic cooling have kept investors on edge.

The blue-chip Dow has lost more than 500 points, or about 4.7 percent, since May 10, when it came about 80 points within reach of its all-time high. The tech-fueled Nasdaq, meanwhile, has lost about 9 percent since hitting its highest level in more than five years last month.

The government reported Wednesday durable goods orders -- big ticket items meant to last three years or more years -- fell 4.8 percent in April, a much sharper drop than the 0.5 percent fall decline forecast by economists surveyed by Briefing.com. It is the first slide in orders since January.

Treasury prices rose, lowering the yield on the 10-year note to as low as 4.99 percent, putting the closely watched benchmark below the fed funds rate, the key short-term rate set by the Federal Reserve, a situation known as an inverted yield curve, which some economists say is a warning sign of an economic downturn.

The World Health Organization also said early Wednesday that a cluster of bird flu cases in Indonesia may have been caused by human-to-human transmission.

Authorities have been warning for some time that if the disease that has previously affected humans exposed to infected birds mutates into something that could be spread between humans, there would be a risk of a worldwide pandemic that could kill millions and greatly slow commerce.

In corporate news, Vonage (Research), a pioneer in phone service over the Internet, had its initial public offering start trading Wednesday, after it priced its IPO shares in the midpoint of its estimated range.

U.S. light crude oil for July delivery fell 90 cents to $70.85 a barrel in electronic trading.

In currency trading, the dollar drifted lower against the euro and was higher versus the yen.

COMEX gold fell $22.20 to $651.50 an ounce.

In global trade, major Asian markets ended higher, and European shares were higher/mixed/lower in early afternoon trading.

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