US technology stocks were knocked lower on Wednesday by a disappointing forecast from bellwether Cisco Systems Inc, but blue chips ended little changed as investors sought out more stable pharmaceutical and consumer names.
Another rise in oil prices put a damper on trading after bomb threats by an anti-US militia in Iraq raised the specter of more export disruptions.
Cisco, the world's largest maker of equipment that directs Internet and other network traffic, jolted the market after forecasting sales for the current quarter that were short of Wall Street's expectations.
"It shocked the market back into the same negative feelings that we had last week - that the economic data is weaker than expected and the economy is not growing enough to support the earnings growth," said John Caldwell, chief investment strategist at McDonald Financial Group.
Adding to the pain were dour outlooks from technology companies National Semiconductor Corp and Kulicke & Soffa Industries Inc.
The forecasts pushed the technology-laced Nasdaq to a new low for 2004 of 1760.50 before it nudged back slightly.
The Nasdaq Composite Index finished down 26.28 points, or 1.45 percent, at 1,782.42. The Dow Jones industrial average was down 6.35 points, or 0.06 percent, at 9,938.32. The Standard & Poor's 500 Index fell 3.25 points, or 0.30 percent, at 1,075.79.
Wednesday's losses were in contrast to steep gains on Tuesday after positive comments from the Federal Reserve on the economy.
Trading was active, with 1.41 billion shares changing hands on the New York Stock Exchange, the same as the 1.4 billion daily average last year. About 1.78 billion shares were traded on Nasdaq, above the 1.69 billion daily average last year.
Decliners outnumbered advancers on the NYSE by about 3 to 2, and about 2 to 1 on Nasdaq.
Blue chips pared steeper losses earlier in the session as investors sought out seemingly safer names.
Pfizer Inc was up 46 cents at $31.77, Johnson & Johnson $1.01 higher at $56.00 and Coca-Cola Co 99 cents higher at $44.45.
Drug companies also become more attractive when interest rates rose because patients continue to use their products despite higher prices and tighter household budgets. Oil prices had a mixed influence on the market. Early in the day prices slumped by more than a dollar as Saudi Arabia, the world's top oil exporter, vowed to raise supplies to meet extra market demand.
But higher prices in the afternoon hindered trading. US light crude closed 28 cents higher at $44.80 a barrel, following a new threat by fighters to bomb oil pipelines in southern Iraq. Also, Algeria raised doubts that Saudi's extra capacity would be enough to meet additional needs.
Among decliners, Cisco dropped $2.17, or more than 10 percent, to $18.29. It was the biggest drag on the Nasdaq and the S&P 500. Downgrades from J.P. Morgan and Merrill Lynch contributed to the stock's slide.
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