NEW YORK (CNN/Money) - The Nasdaq composite index tumbled to a six-week low Tuesday amid concern that companies wrapping up five straight quarters of falling profits are not yet ready to spend on new technology.

Nortel Networks and Verizon Communications became the latest high-profile firms to cut financial forecasts, joining IBM, whose profit disappointment Monday sent its shares tumbling.

Downbeat comments from an investment bank worried about demand for communications equipment sent Cisco Systems lower.

The Nasdaq slipped 43.30 points, or 2.4 percent, to 1,742.57, its lowest finish since Feb. 28. The Dow Jones industrial average lost 40.41, or 0.4 percent, to 10,208.67, narrowing its 2002 gain to 1.8 percent. The Standard & Poor's 500 index lost 7.50, or 0.6 percent, to 1,117.79, widening its loss this year to 2.7 percent.

The Nasdaq, which has not had a winning year since 1999, is 10.7 percent lower in 2002.

Questions about the accuracy of corporate accounting, the strength of earnings and the stability of the Middle East continue.

But one watcher of investor sentiment, Bernie Schaeffer of Schaeffer's Investment Research, said many remain too upbeat on the prospect for stocks, betting on the rosiest of all possible profit and economic scenarios.

That kind of optimism, paradoxically, often presages a selloff -- just like it did two years ago when technology stocks first cracked.

"All these obstacles, (investors) are seeing right through them," said Schaeffer, who forecasts that the S&P 500 could fall as low as 775. "Where is the liftoff going to come from?"

Market breadth was mixed. On the New York Stock Exchange, advancing shares topped declining ones 9-to-7 as 1.2 billion shares changed hands. Nasdaq losers beat winners 5-to-4 as 1.5 billion shares traded.

In other markets, crude oil prices pulled back from recent gains after Saudi Arabia said it would make sure there was enough oil to meet global demand following Iraq's decision to halt crude exports.

The dollar slipped against the euro and yen. Treasury securities rose.

Nasdaq's most actively-traded stock, Cisco Systems (CSCO: up $0.73 to $15.55, Research, Estimates), fell more than 8 percent after RBC Capital Markets cut the company's profit and sales targets for the next two fiscal years.

"The IT [information technology] capital spending environment remains tough," RBC told clients.

The downbeat forecast came a day after IBM (IBM: up $1.27 to $89.01, Research, Estimates), blaming falling orders, issued a profit warning that sent its shares tumbling more than 10 percent.

Cisco's rival, Nortel Networks (NT: down $0.14 to $3.50, Research, Estimates), became the NYSE's most actively-traded stock after saying its first-quarter loss would be wider than expectations. It was another blow for the telecommunications company whose shares once traded above $80.

Verizon Communications (VZ: up $1.20 to $43.90, Research, Estimates), the regional phone company, forecast first-quarter earnings of 72 cents per share when it reports full details April 23. That's below the First Call consensus estimate of 73 cents a share.

"More than anyone else, tech and telecom companies are being hit hardest by the slowdown in capital spending," said John Forelli, portfolio manager at John Hancock. "They still seem to have more inventory and the pickup in demand simply hasn't been there."

Echoing that, Mercator Software (MCTR: down $0.05 to $3.70, Research, Estimates) and Ascential Software (ASCL: up $0.18 to $4.00, Research, Estimates) said their losses would widen beyond forecasts while Citrix Systems (CTXS: down $0.19 to $14.83, Research, Estimates) cut profit targets.

Compaq Computer (CPQ: up $0.48 to $9.76, Research, Estimates) fell even after it said first-quarter profit will meet or beat the consensus Wall Street forecast, which calls for 1 cent a share, days after rival Dell Computer (DELL: up $0.27 to $26.84, Research, Estimates) said its earnings would be in line.

One of the Dow's biggest gainers, Eastman Kodak (EK: up $1.87 to $34.30, Research, Estimates), saw its shares upgraded by Salomon Smith Barney to "outperform" from "neutral." 3M (MMM: up $0.22 to $125.14, Research, Estimates) continued an advance begun last week when the maker of Scotch Tape and Post-it Notes raised first-quarter profit guidance.

Another Dow stock, American Express (AXP: up $0.17 to $41.40, Research, Estimates), also rose.

Dial (DL: up $0.51 to $20.11, Research, Estimates), which makes soap, detergent and air fresheners, said it expects to beat analysts' earnings expectations for the first quarter by at least 5 cents per share due to continued strong domestic sales.

Other companies with positive pre-announcements included Wendy's (WEN: down $0.01 to $37.29, Research, Estimates), Lands' End (LE: down $0.16 to $49.84, Research, Estimates) and Dollar Thrifty Auto Group (DTG: up $1.05 to $22.60, Research, Estimates).

The guidance comes as hundreds of companies prepare to release March quarter results. For most, the numbers won't be good. Profits, according to First Call, are expected to have fallen 9.2 percent overall during the first three months of the year for their fifth straight period of decline. That hasn't happened since 1970.

Bond prices have also been falling, sending yields higher in anticipation of an interest rate hike by the Federal Reserve, which cut borrowing costs 11 times in 2001. But economists don't expect central bankers to raise rates until June at the earliest.

"We think the Fed will probably move in the summer, in the third quarter," David Thwaites, strategist at BNP Paribas, told CNNfn's Market Call.