TECH STOCKS: Cisco Forecast Sends Markets LowerTECH STOCKS: Cisco Forecast Sends Markets Lower

Cisco Systems CEO John Chambers might have said he was optimistic about the economy continuing to improve, but that optimism didn't extend to Wall Street. Though Chambers expressed optimism, a disappointing outlook for tech spending from Cisco put investors in a selling mode Wednesday, with tech stocks taking the brunt of the punishment. Both the information 100 and the Nasdaq Composite index took big hits as investors grew cautious and turned toward blue chips and away from tech issues and small-cap stocks.

The information 100 fell 7.44 points, or 2.3%, to 321.55. The Nasdaq fell 52.07 points, or 2.5%, to 2,014.14. The Nasdaq-100 tracking stock fell 60 cents to $36.33 as more than 109.2 million shares changed hands. The Dow Jones industrials fell 34.44 points, or 0.3%, to 10,470.74, while the Standard & Poor's 500 fell 9.51 points, or 0.8%, to 1,126.52.

Cisco fell $2.33, or 8.8%, to $24.08, although its earnings, reported Tuesday after the closing bell, beat Wall Street's expectations. However, the networking equipment maker indicated that any rebound in spending remains uncertain, triggering the decline in tech stocks.

Another big decliner on the Nasdaq was Ciena, which fell $1.30, or 18%, to $5.99, after the telecommunications equipment maker warned investors that its first-quarter revenue is likely to drop below forecasts. Oracle, which raised its offer for PeopleSoft to $26 a share, or $9.4 billion, fell 64 cents, or 4.6%, to $13.27.

It was a tough day for tech stocks on the Dow, too. Hewlett-Packard fell 72 cents to $23.19, while Intel fell $1.34 to $30.02 and Microsoft fell 28 cents to $27.01.