AP Business WriterNEW YORK (AP) -- A profit warning from McDonald's pulled stock prices lower Friday while investors were still smarting from fears of rising interest rates.

Investors took profits from blue chips for the third straight session, giving the Dow Jones industrials their first weekly decline since Feb. 8.

The Dow closed down 52.17 at 10,427.67, having fallen 155.41 points in the two previous sessions, on worries that the Federal Reserve will soon start raising interest rates. The Fed on Tuesday indicated that future increases are possible now that the economy appears to be recovering.

For the week, the Dow lost 179.56, or 1.7 percent, cutting short a five-week winning streak during which the index climbed 862.99, or 8.9 percent.

The broader market also posted daily and weekly declines. The Nasdaq composite index on Friday fell 17.44, or 0.9 percent, to 1,851.42. The Nasdaq's weekly loss also totaled 0.9 percent.

On Friday, the Standard & Poor's 500 index dropped 4.89 to 1,148.70. The S&P recorded a weekly loss of 1.5 percent.

Analysts said this past week's selling indicates how divided investors' emotions are about the economy. Investors are confident that business is improving but are also worried its progress could be derailed if interest rates are raised prematurely.

Still, analysts said the past week's sell-off was to be expected after the strides stocks have made, especially blue chips.

"There are worries that we have come too far too fast, and are getting ahead of ourselves. And, maybe it is time to take some money off the table," said Hugh Johnson, chief investment officer at First Albany Corp.

Analysts also attributed the selling to investors' caution ahead of first-quarter earnings, which companies will begin releasing in earnest in April.

"The bigger picture is first-quarter earnings," said Barry Berman, head trader for Robert W. Baird & Co.

Kevin Caron, associate strategist at Gruntal & Co., agreed, saying: "The more important thing for the market is that we see a revival in earnings. ... Ultimately, that will be what drives stock prices."

Dow industrial McDonald's fell $1.05 to $27.65 after it warned its first-quarter profit would be below analysts' expectations, citing a weak global economy. McDonald's also said its 2002 earnings results will be at the low end of expectations.

Oil stocks traded lower on a series of ratings downgrades by Salomon Smith Barney. Schlumberger dropped $2.90 to $57.15, and Baker Hughes, which reduced its first-quarter outlook, fell $2.55 to $36.75.

In technology, Hewlett-Packard, a Dow stock, declined 35 cents to $18.15 on a report published in The Wall Street Journal in which the head of HP's services unit said that the unit's revenue and profits are falling short of expectations for this quarter.

Micron Technology fell 61 cents at $33.90 after posting a fiscal second-quarter loss that was a penny a share larger than analysts' estimates.

Declining issues outnumbered advancers nearly 3 to 2 on the New York Stock Exchange. Trading volume was light at 1.23 billion shares, below Thursday's 1.33 billion.

The Russell 2000 index, which measures the performance of smaller company stocks, fell 3.05, or 0.6 percent, to 502.39. But the Russell stood apart from the rest of the market by posting a weekly advance of 0.7 percent.

Overseas, Japan's Nikkei stock average fell 1.6 percent. In Europe, Germany's DAX index gained 0.3 percent, France's CAC-40 advanced 0.5 percent, and Britain's FT-SE 100 declined 0.1 percent.

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