By Dean Goodman

LOS ANGELES (Reuters) - The "Lord of the Rings" sequel racked up a third weekend atop the North American box office Sunday, outpacing its predecessor and headed for the magic billion-dollar mark in worldwide receipts.

Elsewhere, two arthouse hits entered the top 10 after successful expansions: the Jack Nicholson (news) black comedy "About Schmidt" jumped 17 places to No. 5, and the musical "Chicago" rose four places to No. 9.

Overall business began the year on a promising note, with the top 12 films grossing $111 million, up six percent from the year-ago weekend, according to tracking firm Exhibitor Relations. Then, as now, "Rings" director Peter Jackson (news) ruled the roost with his hobbits.

The second installment in New Line Cinema's "Rings" trilogy, "The Two Towers" earned $25.7 million from 3,622 theaters in the three days beginning Friday. The film's 48 percent drop was easily the steepest in the top 10, but it enjoyed a healthy lead over the Leonardo DiCaprio (news) crime caper "Catch Me If You Can," which held steady at No. 2 with $21.3 million from 3,170 theaters in its second weekend.

"The Two Towers" has earned $261.7 million in North America, vaulting into the No. 18 slot on the all-time list. The film is about 25 percent ahead of where its predecessor "The Fellowship of the Ring" was at the same time.

"RINGS" AT $560 MILLION WORLDWIDE

With the awards season still in its early stages, executives at New Line were reluctant to forecast the film's eventual total. While they expect it to surpass the $313 million haul for "Fellowship," they doubt it will break the $400 million barrier.

The film's worldwide total rose to $560 million. David Tuckerman, New Line's domestic distribution president, said $1 billion in sales was "do-able." If it reaches that mark, it would rank No. 2, behind the $1.8 billion haul of "Titanic."

"Catch Me If You Can," director Steven Spielberg (news)'s fact-based tale of a teen-aged con artist, has made off with $97.6 million since its Dec. 25 bow. Industry observers expect the DreamWorks release to end up with about $175 million.

The two dueling romantic comedies, "Two Weeks Notice" (Warner Bros.) and "Maid in Manhattan" (Columbia) held steady in their respective No. 3 & 4 slots. "Two Weeks Notice," starring Sandra Bullock (news) and Hugh Grant (news), earned $11.6 million from 2,755 theaters as its total rose to $69.3 million after three weekends. "Maid in Manhattan," starring Jennifer Lopez (news) and Ralph Fiennes (news), raced to $76.7 million after adding $9 million from 3,056 theaters in its fourth weekend.

"About Schmidt," starring Nicholson as a newly retired actuary staring down death and disappointment, earned $8.8 million from just 816 theaters. The New Line release was previously playing in 34 theaters. After four weekends, it has totaled $12.3 million. Tuckerman said the studio would hold the "Schmidt" theater count steady for a while, opting for a slow and steady expansion powered by good word-of-mouth.

'CHICAGO' SHINES

Miramax's "Chicago" tuned in with $5 million from 304 theaters. Since opening last weekend in 77 theaters, it has kicked up $9.3 million. Its theater average of $16,500 was the highest in the top 10, followed by $10,723 for "Schmidt" and $7,082 for "Two Towers."

Paramount's "The Hours" remains the best performer in the limited-release world with $326,000 from 11 theaters, or an average of $29,636. It has earned $1 million after two weekends. The literary saga, starring Meryl Streep (news), Julianne Moore (news) and Nicole Kidman (news), will go into wide release Jan. 17.

Also off to an impressive start was "Confessions of a Dangerous Mind," the directing debut of George Clooney (news). The Miramax release, which details the secret life of game show host Chuck Barris, grossed $91,789 from four theaters in its first weekend, a $22,947 average.

Miramax's closely watched $100 million period epic "Gangs of New York" slipped one place to No. 6 in its third weekend with $7.4 million and a modest $3,210 average. The total rose to $47 million. Miramax officials did not return calls seeking comment.

Reuters/Variety

LOS ANGELES(Reuters) - Following are the final data for the top 10 movies at the North American box office during the January 3-5 weekend, according to studio figures released Monday by Exhibitor Relations Co. Inc.

Film Three-day Cumulative

1. The Lord of the Rings: The Two Towers .......... $25,017,279

BOX OFFICE SO FAR: $261,031,601

2. Catch Me If You Can .......... $21,142,434

BOX OFFICE SO FAR: $97,437,621

3. Two Weeks Notice .......... $11,126,397

BOX OFFICE SO FAR: $68,810,079

4. Maid in Manhattan .......... $8,621,757

BOX OFFICE SO FAR: $76,328,613

5. About Schmidt .......... $8,533,162

BOX OFFICE SO FAR: $12,028,464

6. Gangs of New York .......... $7,327,177

BOX OFFICE SO FAR: $47,082,059

7. The Wild Thornberrys .......... $5,510,465

BOX OFFICE SO FAR: $31,526,879

8. Drumline .......... $5,303,002

BOX OFFICE SO FAR: $47,539,218

9. Chicago .......... $4,964,938

BOX OFFICE SO FAR: $9,241,533

10. Harry Potter and the Chamber of Secrets .......... $4,653,389

BOX OFFICE SO FAR: $252,097,945

Reuters/Variety

John L.:  Time to get back to the movies.  Everything is updated except for this week.  When movies like Chicago and About Schmidt go wider, I will try to check those out, until then, bye for now.