NEW YORK (CNN/Money) - U.S. stocks cut short a two-day winning streak Wednesday, with the Dow dropping on mixed earnings reports from Coca-Cola and Altria, while the Nasdaq managed to eke out a gain, led by strength in the tech sector.

The Dow Jones industrial average (down 144.75 to 8257.61, Charts) logged a hefty decline of 1.7 percent, falling back below its level at the start of the year, while the S&P 500 index (down 10.90 to 879.91, Charts) dropped a lesser 1.2 percent. The Nasdaq composite (up 3.71 to 1394.72, Charts) lost most of its early gains, but managed to end the day up 0.3 percent.

"In my opinion, the markets have reached a resistance level.... I think it's a little bit of a selloff on technicals," said Tim Heekin, head of stock trading at Thomas Weisel Partners. "Buyers are getting a little bit tired, but I think the market still has a good base to it. A decent floor has been put in. And on any dips, the buyers will come back in."

Investors have been focused on corporate earnings reports this week -- the first of the two biggest weeks for first-quarter reports.

The Dow couldn't fight off weakness led by the mixed profit reports of some key components Wednesday, including Coca-Cola and Altria, while better-than-expected earnings news from Microsoft and Intel late Tuesday acted as a buffer for the Nasdaq.

Once again, it likely will be earnings on the minds of investors Thursday. Some tech names reported mixed news after the close Wednesday.

Apple Computer (APPL: Research, Estimates) posted earnings of 4 cents per share, beating analysts' estimates by 2 cents, but reported a drop in revenue and a 65 percent decline in net income.

Hardware maker Sun Microsystems (SUNW: down $0.03 to $3.32, Research, Estimates) reported a small profit in its fiscal third quarter, meeting Wall Street's estimates, but said that sales were lower than expected.

Chipmaker Advanced Micro Devices (AMD: up $0.30 to $7.90, Research, Estimates) posted a net loss for the quarter of 42 cents a share, compared with a loss of 3 cents a share in the year-earlier period. But the loss was narrower than the 48-cent loss expected by Wall Street, on average.

Thursday also brings a slew of profit reports, including those of computer maker Gateway (GTW: up $0.02 to $2.39, Research, Estimates), wireless equipment maker Nokia (NOK: up $0.22 to $15.18, Research, Estimates), and retailers Office Depot (ODP: Research, Estimates), PepsiCo (PEP: down $0.67 to $39.90, Research, Estimates) and Sears Roebuck (S: down $1.11 to $26.64, Research, Estimates). Investors also will get a look at weekly jobless claims, expected to rise, and the Philadelphia Fed's April survey of manufacturing activity.

Investors acted out against mixed news from Coca-Cola (KO: down $2.63 to $39.90, Research, Estimates) and Altria (MO: down $0.75 to $31.70, Research, Estimates) Wednesday, which weighed on the Dow.

Coca-Cola posted earnings of 37 cents a share, excluding charges, in its latest quarter, coming in line with Wall Street's 37-cent average forecast. But Legg Mason lowered its rating on the company to "hold" from "buy," citing its valuation and calling the earnings' quality "poor." The stock tanked 6.2 percent.

Altria, formerly Philip Morris, said its first-quarter profit fell to $1.07 per share from $1.09 a year earlier, due to a weak U.S. market. The profit did beat analysts' average expectations by a penny. Its shares dipped 2.3 percent.

Local phone provider SBC Communications (SBC: down $0.96 to $20.29, Research, Estimates) also took a hit after saying it would change its accounting method for its telephone-directory advertising business, resulting in a one-time charge of about $1.13 billion, or 34 cents a share. SBC shares dropped 4.5 percent, also adding to the Dow's suffering.

3M (MMM: down $4.64 to $129.00, Research, Estimates) added a last kick lower, sliding 3.5 percent after J.P. Morgan lowered its 2003 and 2004 earnings estimates for the company, saying the new numbers "reflect a slowing global economy" and weakness in the auto and construction markets.

But techs saw some strength in trading throughout the day, as investors cheered better-than-expected profit results from industry leaders Microsoft and Intel, among others.

Microsoft (MSFT: up $0.30 to $24.91, Research, Estimates) said late Tuesday that its quarterly earnings exceeded analysts' average expectations, driving its shares 1.2 percent higher. But the company's outlook was mixed. Microsoft said it expects earnings for the fiscal year, ending in June, to come in above expectations but warned that sales could fall below estimates.

Intel (INTC: up $1.03 to $18.16, Research, Estimates), the world's biggest chipmaker, said after the close Tuesday that its profit for the quarter beat expectations by 2 cents a share, and projected that gross margins for 2003 should be in line with forecasts. But the company warned its sales also could be a little weaker than previously estimated. Its shares rose 6 percent.

"It actually isn't a bad day -- it's a good day for techs," said Douglas Altabef, managing director at Matrix Asset Advisors. "I think the most important thing is that earnings season is going pretty well. A lot of this is perception, and the economy may not be robust, but it's not sick. There's certainly a lot of anxiety out there among individual investors."

Outside the tech sector, Ford's (F: up $0.88 to $9.23, Research, Estimates) stock soared 10.5 percent after the company early Wednesday reported a first-quarter profit of 45 cents per share, up from a loss of 6 cents per share for the same period last year and more than twice analysts' average forecast.

The day's economic news was mixed. The government said the Consumer Price Index for March rose 0.3 percent after gaining 0.6 percent in February. The increase was slightly smaller than economists' expected 0.4 percent rise. The core CPI, which excludes volatile food and energy prices, was flat after rising 0.1 percent in February. Economists expected it to rise 0.2 percent.

Housing starts rose a better-than-expected 8.3 percent in March, while building permits fell 7 percent, which was worse than expected.

Market breadth was negative. On the New York Stock Exchange, declining stocks edged past advancers by a 6-to-5 margin as 1.5 billion shares changed hands. On the Nasdaq, losing stocks slid past winners by an 8-to-7 margin on a volume of 1.5 billion shares.

"On Monday we had a sharp rally on light volume and today we had a sharp decline on heavy volume. Healthy markets tend to do just the opposite," Steve Todd, head of Todd Market Forecast, told CNNfn.

European markets ended mostly lower, and most Asian-Pacific stocks ended higher overnight.

Treasury prices headed higher, with the 10-year note rising 12/32 of a point in price to yield 3.94 percent. The dollar fell against the yen and the euro.

Light sweet crude oil futures for June closed the day unchanged at $27.53 a barrel in New York. Gold for June delivery rose 80 cents an ounce to $326.30.