NEW YORK (CNN/Money) - U.S. stocks edged lower Wednesday on technology selling following Cisco's weak outlook but managed to hang on to a good portion of Tuesday's gains, when the major indexes carved out new multi-month highs.

"We've had a really nice run," said Tom Schrader, head of listed trading at Legg Mason. "I think we need to see a little pullback before we go higher. There's not going to be much in the next two days to change that. Jobless claims tomorrow won't be a market mover. I think we'll probably see a little profit taking the rest of the week."

Thursday's only economic report is weekly jobless claims, due from the Department of Labor. The number of Americans filing new claims for unemployment last week is forecast to have dipped to to 440,000 from 448,00 the previous week, according to the consensus forecast of economists surveyed by Briefing.com.

Thursday also brings quarterly earnings reports from consumer products maker Clorox (CLX: Research, Estimates), telecom Qwest (Q: Research, Estimates) and graphics chipmaker nVidia (NVDA: Research, Estimates).

The technology-fueled Nasdaq (down 16.95 to 1506.76, Charts) lost 1 percent Wednesday, while the Dow Jones industrial average (down 27.73 to 8560.63, Charts) and the S&P 500 index (down 4.77 to 929.62, Charts) posted smaller declines after bouncing on both sides of unchanged throughout the session.

Cisco reported quarterly results late Tuesday that edged expectations, but the firm's CEO warned that current quarter revenue won't meet estimates and that demand for information technology spending hasn't seen a substantial pick-up.

The comments led technology investors to sell a variety of shares, although the decline was partly attributable to profit taking following Tuesday's run, and a delayed reaction to the Federal Reserve's decision to keep interest rates steady, but warn about the weak economy.

The Nasdaq finished Tuesday at the highest it has been since June 2002, and the S&P 500 reached its highest point of the year so far. Traders said that a small retreat after that kind of surge was reasonable.

Cisco (CSCO: down $0.42 to $15.48, Research, Estimates) delivered fiscal third-quarter results late Tuesday that improved 35 percent from a year earlier, but said its fourth quarter would show no improvement in sales from the previous three months.

The company also issued discouraging comments about a much hoped for pick-up in information technology spending. Cisco is the leading computer networking gear maker, and if it's not seeing increasing demand for its products, that doesn't bode well for smaller competitors.

The stock lost 2.5 percent, but some analysts argued that the impact could have been broader.

Investors also seemed to show a muted response to Tuesday's decision by the Federal Reserve to hold interest rates steady at a 40-year low but raise concern over the possibility of deflation.

"We've been given this embarrassment of riches where the market seems to want to go up every day, regardless of the news," said Ram Kolluri, chief investment officer at GlobalValue Investors.

Even amid the modest selling Wednesday, stocks managed to stave off worse declines, largely because of a broad change in sentiment.

Wall Street has made a substantial advance in the weeks since fighting ended in Iraq, without many signs of solid improvement in the economy or corporate fundamentals to back up the rise in stock prices.

"The market has been happy with the first-quarter results, but why? We're seeing companies beat lowered estimates and do it because of cost-cutting, not top-line growth," Kolluri added. "Unless the earnings start to improve, the economy picks up, this market is going to continue to be too richly valued."

Although the Dow fell, too, protecting it from worse declines was Coca-Cola (KO: up $2.25 to $43.27, Research, Estimates), which rose 5.5 percent after Morgan Stanley upgraded the stock to "overweight" from "equal-weight" based on valuation and the belief that Coke's outlook has improved. The firm also raised Coke's 2003 and 2004 earnings-per-share forecast.

The dollar continued to drop against major currencies, as international investors saw little reason to buy the low-yielding U.S. currency when better returns were available elsewhere. The greenback carved out a new 10-week low against the yen, but managed to recover from a new four-year low versus the euro that was hit Tuesday.

Losers edged winners on the New York Stock Exchange, while decliners topped advancers 9 to 7 on the Nasdaq. Volume was solid, extending a recent trend in the market. Some 1.49 billion shares traded on the NYSE, and 1.87 billion shares changed hands on the Nasdaq.

Bonds rallied, with the 10-year note adding 29/32 of a point in price, pushing its yield down to 3.67 percent.

Light sweet crude oil futures rose 51 cents to $26.23 a barrel in New York. Gold fell 60 cents to trade at $342.20 an ounce in New York.