NEW YORK (CNN/Money) - All investor eyes likely will focus on Secretary of State Colin Powell's remarks to the U.N. Security Council Wednesday, after stocks sank ahead of the speech Tuesday.

"It's two outs, bottom of the ninth -- he's gotta come through," said Angel Mata, head of equity trading at Legg Mason. "He has to come up with something definite and substantial. Anything less than that will be taken as a negative by the market."

Concerns about a possible war with Iraq looked to remain at the forefront in anticipation of Powell's address. Powell is expected to detail the United States' take on the findings of U.N. weapons inspectors, including providing evidence Iraq still has weapons of mass destruction and is keeping evidence of those weapons hidden from inspectors.

"[I think] the market's going to lift a bit because we are so oversold," said Peter Green, market analyst at MKM partners. "But there will be a decline going into Powell's speech, then, I think, it will rally during the speech."

Also on investors' minds: Cisco Systems reported fiscal second-quarter results after the bell Tuesday that showed sales met estimates and earnings beat forecasts by a penny, but the company provided a cloudy forecast.

After the close of trading, Cisco (CSCO: down $0.28 to $13.20, Research, Estimates), the No. 1 maker of computer network gear, reported quarterly earnings of 14 cents a share, under generally accepted accounting principles, beating analysts' consensus expectations by a penny, according to analysts surveyed by First Call. Its profit rose from 9 cents a year earlier. Sales dipped to $4.7 billion from $4.8 billion in the year-ago period, in line with expectations.

CEO John Chambers said he was pleased with the numbers, but the company lowered its sales guidance for the fiscal third quarter, which ends in April, during a conference call.

Cisco has maintained for the past several quarters that the corporate-technology spending environment isn't improving but that it has been able to hold up better than its competitors due to cost-cutting and market-share gains.

Cisco shares trended lower but were little changed in after-hours trading.

"My suspicion is the stock is not doing much now, it's not earth-shattering," said Peter Green.

On Tuesday, the Dow Jones industrial average (down 96.53 to 8013.29, Charts) lost 1.2 percent, while the Nasdaq composite (down 17.64 to 1306.15, Charts) slipped 1.3 percent and Standard & Poor's 500 index (down 12.12 to 848.20, Charts) sank about 1.4 percent.

The Nasdaq fell below 1,300 during trading for the first time in three months, marking its lowest close since late October. The Dow and S&P fell after two consecutive days of gains.

A surprise charge from insurer AIG and some negative news from the telecom sector pulled stocks lower Tuesday.

American International Group (AIG: down $3.63 to $51.70, Research, Estimates) led insurers lower after it said late Monday it will take a $1.8 billion charge in the fourth quarter to pay for higher-than-expected claims from U.S. businesses. AIG made $1.84 billion for the quarter.

"It seems AIG surprised everyone on the heels of news that Chubb reported a complicated quarter," Mata added. "The market doesn't want to hear any bad news right now, and it's giving people reason to sell."

Insurer Chubb (CB: down $2.97 to $51.60, Research, Estimates) reported a jump in fourth-quarter profit, but said it would take a reserve charge and forecast lower-than-expected earnings for the year. The reports weighed on the sector, pulling Aetna (AET: down $1.20 to $41.50, Research, Estimates) and Hartford Financial (HIG: down $1.37 to $39.99, Research, Estimates), among others, lower.

Shares of telecommunication stocks felt pressure as French telecom Alcatel (ALA: down $0.22 to $6.78, Research, Estimates) warned its sales could fall as much as 30 percent in the current quarter. The company also predicted a 15 percent decline in the overall telecom sector in 2003.

Separately, telecom gear maker Tellabs (TLAB: down $0.44 to $7.36, Research, Estimates) said its chief financial officer resigned. Shares of Ericsson (ERICY: down $0.66 to $6.65, Research, Estimates), which posted its seventh consecutive quarterly loss Monday and said demand would remain weak, also fell.

The warning from Alcatel pressured European markets, which mostly ended lower, while Asian markets closed mostly higher Tuesday.

Treasury prices rose on the stock weakness, with the benchmark 10-year note gaining 17/32 of a point in price to 100-17/32, yielding 3.93 percent. When bond prices rise, yields decline. The dollar fell versus both the yen and euro on war worries after rallying over the past few sessions.

In commodities trading, light crude oil futures for March delivery rose 82 cents to $33.58 a barrel. Gold rallied to a seven-year high on the war concerns, gaining $8.30 a Troy ounce to $379.90 for April delivery.

Market breadth was negative. On the New York Stock Exchange, decliners beat advancers 3-to-2 as 1.4 billion shares traded. On the Nasdaq, losers beat winners 5-to-3 as 1.3 billion shares changed hands.

The markets shrugged off a government report saying factory orders for December rose 0.4 percent compared with a 0.8 percent drop in November. The rise was slightly higher than the 0.3 percent increase economists were expecting, according to a group surveyed by Briefing.com.