NEW YORK (CNN/Money) - The Nasdaq sank to a lower close Wednesday, failing to shake off disappointment with Cisco's quarterly earnings, while the Dow managed to cling to gains.

The Nasdaq composite (down 20.82 to 1652.68, Charts) sank 1.2 percent, but the Dow Jones industrial average (up 25.42 to 9061.74, Charts) eked out a 0.3 percent gain and the Standard & Poor's 500 index (up 1.62 to 967.08, Charts) clocked a 0.2 percent rise.

The Nasdaq fought for gains throughout the session to no avail, as pressure from Cisco Systems led techs into a depression. Meanwhile, the Dow inched its way out of negative territory, lifted by gains in the financial sector.

Also boosting the Dow: Concerns about rising interest rates and sinking bond prices were quelled a bit Wednesday as demand for the Treasury's sale of five-year notes ran high. Demand in the Treasury auction of three-year notes Tuesday was disappointing. The Treasury's sale of 10-year notes is set for Thursday.

"I am pleasantly surprised that we are able to change our opinion from yesterday," said Art Hogan, chief market analyst at Jefferies & Co. "Yesterday's bond issuance didn't go too well -- today's did. That could reverse itself tomorrow when we have a plethora of economic data and the 10-year bond issuance."

Treasury bond prices rose Wednesday, with the 10-year note yield slipping to 4.28 percent from 4.39 percent late Tuesday.

On the docket Thursday are readings on productivity, jobless claims and wholesale inventories. The government's reading on productivity for the second quarter, due before the opening bell, is forecast to have jumped 4 percent from a 1.9 percent rise in the preceding quarter.

Investors also eagerly await a reading on weekly jobless claims, which are expected to rise to 395,000 from 388,000 in the previous week, according to a survey of economists conducted by Briefing.com. Weekly claims for unemployment benefits have held below 400,000, a key level indicating expansion in the labor market, for two straight weeks. Prior to the past two weeks, claims hadn't slipped below 400,000 for more than five months.

At 10 a.m. ET, the government is expected to release its July report on wholesale inventories, which are expected come in flat after a decline of 0.3 percent in June, according to Briefing.com.

Techs fell prey Wednesday to negative sentiment surrounding Cisco's quarterly earnings, which were release after the bell Tuesday. Shares of Cisco (CSCO: down $1.21 to $17.65, Research, Estimates) sank 6.4 percent as investors expressed disappointment with the company's report.

Cisco posted fiscal fourth-quarter earnings and sales numbers that met Wall Street estimates and provided virtually in-line revenue guidance for the current quarter of 2 to 4 percent growth. But analysts said investors may have been looking for Cisco to report earnings that topped estimates, as has been its custom in recent quarters -- and for a more bullish outlook.

But with most of the S&P 500 having already reported second-quarter fiscal results, traders said investors would be keeping a watchful eye on economic reports -- especially those on the labor market. Stocks rose sharply in the first half of the year on investors' hopes for an economic recovery in the second half of 2003, but the rally has stalled a bit in recent weeks as the summer market doldrums took hold.

"My suspicion is that we're near a near-term low," said Peter Green, market analyst at MKM Partners. "The reality is the majority of the selling short-term is over with -- the market doesn't want to go down."

Positive comments from several analysts helped lift financials from the outset Wednesday.

Dow 30 member American Express (AXP: up $1.10 to $43.55, Research, Estimates) jumped 2.6 percent, while Citigroup (C: up $0.45 to $43.52, Research, Estimates) rose 1 percent.

Credit Suisse First Boston raised its 2003 earnings estimate for Prudential (PRU: up $0.93 to $35.55, Research, Estimates), whose shares added 2.7 percent. Shares of Morgan Stanley (MWD: up $1.29 to $47.09, Research, Estimates) also saw gains of 2.8 percent after an upgrade from Smith Barney.

Merrill Lynch raised its ratings on Credit Suisse Group (CSR: down $0.22 to $31.83, Research, Estimates) and Lehman Brothers (LEH: up $1.85 to $62.65, Research, Estimates), which bounced 3 percent.

Financials led the market's gains in the first half of the year, but their rally diminished in recent weeks as the trading slowed heading into the summer months and concerns about rising interest rates took hold.

Strength in automakers also helped to boost the Dow's gains. Shares of General Motors (GM: up $0.36 to $36.56, Research, Estimates), a Dow component, rose 1 percent and Ford (F: up $0.13 to $10.65, Research, Estimates) saw gains of 1.2 percent after Lehman Brothers upgraded its ratings on the automakers.

Meanwhile, big gains on the homebuilder front aided the broader market. Shares of Beazer Homes (BZH: up $3.50 to $79.25, Research, Estimates) jumped 4.6 percent, Pulte Homes (PHM: up $3.30 to $63.85, Research, Estimates) rose 5.5 percent, Lennar (LEN: up $3.30 to $66.19, Research, Estimates) added 5.3 percent and Ryland Group (RYL: up $2.98 to $65.88, Research, Estimates) gained 4.7 percent

The Dow has remained in a tight trading range, but the Nasdaq has retreated in the past four trading sessions. The Nasdaq also was the biggest loser among the major indexes Tuesday, sinking 2.4 percent. The Dow and the S&P 500 each dipped 1.6 percent.

Meanwhile, European markets closed lower Wednesday. Asian-Pacific stocks also ended mostly lower. (Check the latest on world markets).

Light crude oil futures slipped 52 cents to $31.70 a barrel in New York despite earlier uncertainty about when Iraq will begin exporting crude and in the wake of Tuesday's bombing at a Marriott hotel in Indonesia. Gold rose $1.20 to $352.40 an ounce in New York.

The dollar edged up against the euro and the yen.

Market breadth was mixed on moderate volume. Advancing stocks edged past decliners on the New York Stock Exchange, as 1.5 billion shares changed hands. On the Nasdaq, losers beat out winners 5 to 3 as 1.8 billion shares traded.