Dow slips, techs hang on to gains

NEW YORK (CNNMoney.com) -- Cisco's strong earnings gave a lift to the Nasdaq composite Wednesday, but the Dow gave up attempts at another record breaking close after hitting an all-time record earlier in the session.

The Nasdaq (up 12.40 to 2,483.89, Charts) composite added 0.5 percent with roughly one hour left in the session.

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The Dow Jones industrial average (down 29.80 to 12,636.51, Charts) lost about 0.2 percent, after hitting a record trading high earlier in the session.

The broader S&P 500 (down 0.38 to 1,447.62, Charts) index was little changed, after flirting with a fresh 6-1/2 year high earlier.

Cisco's earnings report had propelled technology shares throughout the early afternoon, and given a smaller boost to the blue chip stocks. Stocks also benefited from falling oil prices.

However, the advance lost steam by the afternoon, with a variety of commodity and other economically sensitive shares declining.

Cisco Systems (Charts) reported quarterly sales and earnings late Tuesday that rose from a year earlier and topped forecasts. Shares gained 4 percent and the stock was the Nasdaq's most-actively traded.

The company's upbeat earnings report was a relief to investors after a string of discouraging technology sector financial reports.

"The Cisco news helps," said Greg Church, president at Church Capital.

However, he said that broader factors that have been lifting stocks continue to provide support as well.

"Earnings have been well received, the economy is chugging along and nearly every day we're seeing merger news, private equity deals," Church said.

Market breadth remained positive. On the New York Stock Exchange, winners beat losers by a narrow margin on volume of 1.13 billion shares. On the Nasdaq, advancers beat decliners by a similar margin on volume of 1.78 billion shares.

In addition to Cisco, a variety of large technology shares advanced, including Intel (up $0.14 to $21.45, Charts) and Hewlett-Packard (up $0.16 to $42.17, Charts).

Broadcom (up $1.73 to $33.72, Charts) rose in active Nasdaq trading after Morgan Stanley upgraded it to "overweight" from "equal weight," according to Reuters.

Nortel Networks (up $1.28 to $27.21, Charts) rose after announcing job cuts over the next two years as part of a cost-cutting plan.

A variety of Internet shares advanced, including Yahoo (up $0.43 to $29.78, Charts), eBay (up $0.42 to $33.27, Charts) and Amazon.com (up $0.67 to $38.94, Charts). The Goldman Sachs Internet (Charts) index added 1.7 percent.

However, the blue chips had a tougher time, with the selloff in oil prices dragging on Exxon Mobil (down $0.51 to $74.63, Charts) and other oil stocks.

The Dow was protected from steeper declines by strength in Caterpillar (up $1.06 to $65.48, Charts), DuPont (up $0.39 to $51.00, Charts) and select other stocks.

In deals news, Equity Office (down $0.58 to $55.47, Charts) shareholders have approved a $23 billion takeover offer by private-equity firm Blackstone Group, after rival bidder Vornado Realty Trust (up $7.56 to $134.56, Charts) dropped out earlier in the day.

Shares of Dow component Walt Disney (up $0.09 to $35.28, Charts) were little changed ahead of its quarterly earnings announcement, due after the close Wednesday.

With around 70 percent of the S&P 500 earnings already out, results are on track to have risen about 10.6 percent in the fourth quarter versus a year ago, according to the latest figures from Thomson Financial. That's a blended number, combining reported and expected earnings.

Although the growth rate is slower than in recent quarters, by topping the 10 percent mark, it extends the S&P 500's track record to 14 consecutive quarters of double-digit expansion, as per Thomson.

Crude oil for March delivery fell $1.17 to $57.71 a barrel on the New York Mercantile Exchange. The price of oil seesawed after the weekly inventories report showed a steeper-than-expected decline in heating oil supplies.

Oil prices slumped in the first part of January, before rebounding more recently. Investors are keeping an eye on the $60 a barrel mark. Should the price of oil move back above that again, it could spark a little selling, analysts say, as it is seen as a key psychological level.

On the economic front, the first read on fourth-quarter productivity came in at a 3 percent growth rate, up from the previous month and beating forecasts for a 2 percent reading. Unit labor costs, the report's inflation component, came in at a smaller-than-expected 1.7 percent rate. (Full story).

The overall report seemed to further bets that economic growth, although moderating, remains solid, and that inflation pressures are dwindling.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 4.74 percent from 4.76 percent late Tuesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained versus the yen and slid versus the euro.

COMEX gold for April delivery fell $1.40 to $657.30 an ounce.

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