Financial stocks dragged the market lower as profit-takers took advantage of yesterday's rally. The Dow lost 48 points to 7727 while Nasdaq dropped 15 points to 1539.

On the upside

Shares of Blackstone Group (NYSE: BX) extended yesterday's rally on hopes that the government purchase of toxic assets may stabilize its fund management operations.

Shares of Phillips-Van Heusen (NYSE: PVH) rose after an analyst upgraded the company the shoe and clothing maker.

Petroquest Energy (NYSE: PQ) offered an upbeat 1st quarter production outlook.

On the downside

The banking sector gave up some of yesterday's gains as traders took profits. Shares of Citigroup (NYSE: C), Bank of America (NYSE: BAC) and Wells Fargo (NYSE: WFC) retreated.

Newell Rubbermaid (NYSE: NWL) announced plans to raise $250 million through a convertible note offering while slicing its dividend in half.

Spices and seasonings company McCormick & Company (NYSE: MKC) expects weak sales growth through 2009 while maintaining a profit.

In the broad market, declining issues outpaced advancers by a margin of more than 2 to 1 on the NYSE and by nearly 2 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks fell 5 points to 428.