Technology stocks fell on Thursday as investors worried that the spillover from the credit crisis may be starting to hurt business spending.
Comments from Federal Reserve Chairman Ben Bernanke also added caution after he said in testimony before Congress that the economy faced risks on both the growth and inflation fronts.
Investors sold shares of technology companies a day after Cisco Systems Inc Chief Executive John Chambers said his company was hit by dramatic decreases in orders from U.S. banks and retailers, triggering concerns about Cisco's growth prospects and sending its shares plunging.
Shares of Cisco, the largest maker of computer networking equipment, led declines on the Nasdaq, down 6.5 percent at $30.65.
It's all Cisco, said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.
Cisco, since September, has had a decent run in the face of a down market. With the market becoming skittish, the Googles of the world had been holding up great until today, (but) there's just so much they can take.
The Dow Jones industrial average was down 9.10 points, or 0.07 percent, at 13,290.92. The Standard & Poor's 500 Index was up 1.75 points, or 0.12 percent, at 1,477.37. The Nasdaq Composite Index was down 21.04 points, or 0.77 percent, at 2,727.72.
Higher crude oil prices lifted shares of Exxon Mobil Corp, whose 3 percent advance limited losses on the Dow and underpinned the S&P 500.
Bernanke's said that when Fed policy-makers met on October 30-31, they saw both downside risks to economic growth and important upside risks to inflation, citing oil and other commodity price increases and a drop in the dollar's value.
The housing market contraction seems likely to intensify, and household spending and business investment may decelerate as well, he added.
(Additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)