The Dow Jones industrial average fell 22 points to close at 10,876.68.
"We're seeing a rotation into technology," Alan Skrainka, chief market strategist at Edward Jones, told Reuters. "There's a growing sense that the U.S. economy has bottomed out and will show improvement in the months ahead."
Morgan Stanley analyst Christ Stix issued a cautious note on Cisco Systems, but investors ignored his warnings. They sent the stock up based on his research, which said that spending has leveled out at the company's North American enterprises. The stock closed up $2.20, or 12 percent, to $20.
That news came a day after a report by the National Association of Purchasing Manufacturers that indicated the manufacturer sector is stabilizing after months of losses.
i2 Technologies, promoting President Greg Brady to the top spot. He replaces Chairman Sanjiv Sidhu, who said he will dedicate most of his time to working with customers, employees and partners. i2 shares gained $2.26 to $20.03.
At a J.P. Morgan H&Q conference this week, venture capitalists said too much money had been thrown at shaky technology companies in recent years. But they added that it's entirely possible that the funding spree could pick up again, once everyone's recovered from the most recent economic downturn.
Charter Communications lost 43 cents to $22, even though the company reported sharply better first-quarter results, bolstered by gains in digital subscribers and its high-speed Internet service.
Online consumer spending should hit $65 billion by the end of the year, according to a new study conducted by industry group Shop.org.
In leading volume movers, Intel closed up 76 cents to $31.94. Oracle rose $1.13 to $17.17, and Microsoft dropped 41 cents to $69.76.
Nortel Networks moved up $1.11 to $16.55. JDS Uniphase rose $1.75 to $23.85. Lucent Technologies inched up 37 cents to $11.27, and EMC closed up $2.06 to $44.
Staff and Reuters contributed to this report.