NEW YORK (CNNfn) - The Nasdaq composite index snapped a five-session winning streak Thursday as investors dumped technology stocks that ran up through most of June.
Cisco, Intel and Oracle tumbled, pushing the Nasdaq below the 4,000 mark it cracked for the first time in two months on Tuesday.
Explaining the losses, some analysts cited the rising price of oil. The gains in the widely used commodity revived inflation fears and come three trading sessions ahead of Federal Reserve's next meeting on interest rates.
"I think what happened today is a lot of investors are disappointed about the outcome of the OPEC meeting," Douglas Cliggott, U.S. equity strategist at J.P. Morgan told CNN's Street Sweep. Rising oil prices can act to slow consumer and business spending, crimping corporate profit.
 At the same time, others were reluctant to divine any fundamental reason behind the loses, which spread across all the major U.S. market indexes.
"It looks like profit taking more than anything else," said Brian Piskorowski, market analyst at Prudential Securities. "The Nasdaq has had a nice five-day run."
While most corporate profit reports don't come out until next month, several high-profile companies such as Honeywell and Xerox already warned that earnings will miss expectations. Analysts fret that more disappointments could be on the way.
"Clearly there's some issues over earnings this quarter," said Richard Cripps, chief market analyst at Legg Mason. He noted most firms will post lower second quarter results than those of the first three months of 2000.
The Nasdaq fell 127.15 points, or 3 percent, to 3,936.87, reversing all of Wednesday's 50.65-point rise that put the index within 6 points of where it ended 1999.
 The Dow Jones industrial average shed 121.62, or 1 percent, to 10,376.12. The S&P 500 shed 26.95 to 1,452.18. Losses in Intel weighed on all three indexes.
In recent weeks, the Nasdaq has outperformed the Dow. Barry Hyman, chief market analyst at Ehrenkrantz King Nussbaum, sees the pattern continuing as investors return to the growth stocks that performed well through March.
More stocks fell than rose. Declining issues on the New York Stock Exchange beat advancing ones 1,865 to 996 on trading volume of 1 billion shares. Losers topped winners on the Nasdaq by 2,431 to 1,538 on volume of more than 1.6 billion shares.
In other markets, Treasury securities fell. The dollar rose against the euro but fell versus the yen.
Techs lower
Technology stocks, big winners through most of June, fell Thursday.
Cisco Systems (CSCO: Research, Estimates) dipped 2-7/8 to 64-9/16, Intel (INTC: Research, Estimates) shed 4-15/16 to 134-1/16, and Oracle (ORCL: Research, Estimates) shed 4-11/16 to 81-1/2.
Hurting the Dow, Honeywell continued a slide that began Monday when the technology conglomerate warned it would miss Wall Street's second-quarter earnings estimates. Honeywell (HON: Research, Estimates) fell 2 to 35; the stock has tumbled more than 27 percent since issuing the warning.
Morgan Stanley Dean Witter & Co. (MWD: Research, Estimates), meanwhile, became the latest brokerage to post strong results, reporting second-quarter earnings of $1.26 a diluted share, above Wall Street forecasts and the 97 cents a share earned a year earlier. But that didn't help its shares, which shed 2-7/16 to 83-3/16.
 Linda Jay, a New York Stock Exchange floor trader for RPM Specialists, told CNNfn's Market Call that she thinks stocks won't do much until the end of next week's Federal Reserve policy meeting. But after that, they could stage a rally. (449K WAV) (449K AIFF).
Among the day's gainers, Burr-Brown (BBRC: Research, Estimates) surged 27-3/8 to 100. Texas Instruments (TI: Research, Estimates) agreed to acquire analog chipmaker for $7.6 billion in stock. Texas Instruments fell 4-3/4 to 134.
Micron Technology (MU: Research, Estimates) tumbled 5-1/4 to 85-1/2. The chipmaker reported quarterly earnings of 47 cents per share after the close of trading Thursday, beating Wall Street expectations of 37 cents.
Oil rises
The price of oil rose Thursday, a day after OPEC agreed to boost production. Crude for August delivery jumped 82 cents to $32.18 a barrel. Explaining the rise, some analysts said the cartel did not go far enough to increase the supply of oil, whose sharp price rise has troubled politicians, Federal Reserve inflation fighters and drivers just as the peak summer travel season gets under way.
Exxon Mobil (XOM: Research, Estimates), the world's biggest oil producer, fell 1-1/4 to 82-11/16.
 Looking ahead, analysts see stocks hewing to a trading range as investors await certainty about the direction of interest rates and the state of corporate earnings. Most expect the Federal Reserve to leave rates unchanged next week, but few are willing predict the Fed's credit-tightening campaign is over.
For the months ahead, J.P. Morgan's Cliggott is not bullish on the market. He envisions a combination of rising inflation and slower growth -- a phenomenon the economist in the 1970's dubbed "stagflation" -- hurting stocks.
"We're telling people to be cautions," he told Street Sweep.
Cliggott said energy and consumer staples stocks, traditional defensive plays, may be a good place to park money during a broader market slowdown. 
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