NEW YORK (CNN/Money) - Stocks headed for a mixed open Wednesday, as Cisco's improved quarterly results competed with continued worries about the pace of economic growth going forward.

Stocks slumped Tuesday, with the Dow losing more than 100 points, as investors worried about the pace of growth and reacted to talk of big losses at a prominent hedge fund, analysts said.

The Dow Jones industrial average (down 103.23 to 10,281.11, Charts) lost around 1 percent, or 103 points. It was the average's biggest one-day dip of more than 100 points since the end of April.

The broader Standard & Poor's 500 (down 12.62 to 1,166.22, Charts) lost just over 1 percent, while the Nasdaq composite (down 16.90 to 1,962.77, Charts) lost nearly 0.9 percent.

Treasury prices rallied, sending yields lower, with jittery investors putting money into the relatively safe-haven option of bonds. The dollar fell versus the euro and yen.

After the close, Cisco Systems (unchanged at $18.21, Research) reported fiscal third-quarter earnings and sales that rose from a year ago and edged analysts' estimates.

The company also forecast fiscal fourth-quarter and fiscal year 2005 sales growth that was largely in line with previous forecasts. Shares rose around 1 percent after hours.

DreamWorks Animation SKG (down $2.00 to $36.50, Research) reported lower-than-expected earnings that fell from a year ago, due in part to weaker-than-expected home video sales of Shrek 2. Shares fell almost 17 percent in after-hours trade.

Also after the close, Yahoo! (down $0.53 to $34.06, Research) said it launched a new online music subscription service. The service competes with RealNetworks (down $0.06 to $7.30, Research)' Rhapsody and Napster (down $0.05 to $6.35, Research) by offering lower prices.

Stock markets have been volatile lately amid confusion about the health of the economy. The latest reports have painted a mixed picture -- such as the recent slower first-quarter gross domestic product growth report versus the surprise rise in April payrolls.

On Wednesday, investors will keep an eye on the March trade balance. The trade gap is expected to have widened to $62.0 billion in the month from $61.0 billion last month.

In addition to the broader economic concerns, and worries ahead of Cisco, investors may have also been unnerved Tuesday by some company-specific news, said Art Hogan, chief market analyst at Jefferies & Co.

"There are a lot of cross currents today," Hogan said. "And there is talk that one of the big hedge funds is going under the waves."

Hogan also cited speculation about a yet-to-materialize dividend cut at General Motors (Research) and continued accounting problems at insurer American International Group (Research) as events that may have set traders up for losses. "There's a lot of bets that could have blown up," he said.

General Motors said Monday it will maintain its high dividend for the second quarter, despite financial hardships at the world's largest automaker, Reuters reported. GM's debt rating was recently cut to "junk" status by Standard & Poor's.

"There's a lot of pessimism that's being expressed in this selloff," said Ken Tower, chief market strategist at CyberTrader. "I think it's partly diminishing growth expectations and partly the recognition that some portions of the market have been declining for months."

But Tower said the increased pessimism might actually bode well for the market over the short term, since when expectations are lower, it's more likely that fresh economic reports will exceed forecasts and boost the markets.

Delta Air Lines (down $0.33 to $2.97, Research) slumped 10 percent on new worries that it may have to file for bankruptcy.

The air carrier warned that it will post substantial losses in 2005, due to insufficient cash flow and the impact of high fuel prices and low airfares.

The weakness in airlines contributed to losses on the Dow Jones Transportation Average (down 60.50 to 3,498.56, Charts), which lost 1.7 percent.

Morgan Stanley (down $1.33 to $49.42, Research) sank 2.6 percent after embattled CEO Philip Purcell, speaking to investors, said the company's financial performance will improve, but not overnight.

He also said that market conditions have worsened over the last few months, and that this will hurt second-quarter results.

Dissidents launched a campaign in March to get Purcell removed, and a number of high-level bankers have left since then amid dissatisfaction with his performance.

Other financials weakened as well, with the Amex Securities Broker/Dealer (down $2.72 to $142.05, Research) index falling 1.9 percent.

Aluminum producer Alcoa Inc. (down $0.72 to $28.63, Research) lost 2.4 percent after the company said a steep drop in the metal's prices could hit its bottom line.

Other Dow stocks falling included IBM (down $1.68 to $73.30, Research) and AIG (down $1.31 to $53.27, Research), which each lost more than 2 percent.

Priceline.com (down $2.70 to $23.94, Research) shares slipped after the online discount travel site reported mixed results late Monday. The company posted first-quarter revenue that grew from a year ago, but was short of analysts' forecasts, and earnings that edged past estimates.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by eleven to one on volume of 1.46 billion shares. On the Nasdaq, decliners beat advancers by two to one on volume of around 1.63 billion shares.

U.S. light crude oil for June delivery rose 4 cents to settle at $52.07 a barrel in New York after rising about $1 on the New York Mercantile Exchange Monday.

Treasury prices rose, lowering the 10-year note yield to 4.20 percent from 4.27 percent late Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar was weaker versus the euro and the yen.

COMEX gold rose $1 to settle at $427.90 an ounce.