The Dow Jones industrial average was down 7.15 to 10,866.46 for the day.
Cisco, the most actively traded stock Wednesday, fell $1.25 to $19.13. Tuesday evening, the network-equipment giant provided the grisly details behind its astonishing $2.25 billion inventory write-off in the third quarter. It essentially admitted that it, too, was caught up in the Internet hype that, at its peak, gave the company the highest market capitalization in Wall Street history.
Intel, the second most actively traded stock, also stumbled. It was down $1.63 to $29.85. Cisco also dragged down CNET's semiconductor index, down 4.69 percent, and its networking index, down 5.13 percent.
"The Cisco news is a shock to the system, but overall I don't think it's going to have a major long-term effect," Phil Flynn, senior market analyst at Alaron.com, told Reuters. "I kind of equate this to the employment report; we got the bad news early, the (stock) market reacts and then it's going to bounce back."
Chipmaker National Semiconductor also reported some bad news Tuesday. It warned that its revenue and earnings will fall short of Wall Street estimates and said it will eliminate 1,100 jobs, about 10 percent of its work force. But shares were unchanged for the day, closing at $25.
Shares of 3Com tumbled 50 cents to $5.67 after the troubled networking-equipment maker said it faces greater uncertainty about its revenue for the fourth quarter.
WebMD was down 82 cents to $ 8.23 at market close after reporting first-quarter results Tuesday night. The online healthcare company passed off its new deal with AOL as a huge positive in the conference call following its first-quarter report. But analysts say the deal won't mean much--at least for the next couple years.
Worldcom, up 31 cents to $18.29, began the sale of its $11.8 billion bond, the largest ever by a U.S. company.
Amazon was down $1.17 to $15.01, AOL Time Warner rose 7 cents to $52 and Yahoo fell 88 cents to $18.86.
Microsoft slipped $1.66 to $70.40, and Oracle was down 4 cents to $17.
Staff and Reuters contributed to this report.