A disappointing quarterly performance from Cisco Systems Inc. (CSCO) - Get Report  on Thursday, Aug. 17, triggered losses in the tech sector and led to a triple-digit decline on the Dow Jones Industrial Average.

The Dow was down 1.25%, falling 247 points and ending lower for the first day in five. The S&P 500 slid 1.54% and the Nasdaq fell 1.94%.

Dow component Cisco Systems fell 4% on Thursday after posting a decline in quarterly profit and sales. Adjusted earnings dropped 3%, while revenue declined 4%. Non-GAAP profit of 61 cents a share was in-line with estimates. Revenue of $12.13 billion came in $60 million higher than estimated, but has fallen for seven straight quarters in a row.

By segment, Cisco's core switching and routing businesses saw another quarterly drop, falling 9% year-over-year. Data center and collaboration fell 4% and 2%, respectively.

Cisco expects further drops in sales over its first quarter. The networking tech developer anticipates a 1% to 3% decline in first-quarter revenue and earnings of 59 cents to 61 cents a share, wrapping estimates of 60 cents.

Cisco's decline pulled the tech sector lower. Other tech names including Apple Inc. (AAPL) - Get Report , Amazon.com Inc. (AMZN) - Get Report , Nvidia Corp. (NVDA) - Get Report , and Microsoft Corp (MSFT) - Get Report were lower. The Technology Select Sector SPDR ETF (XLK) - Get Report fell 1.9%.

Nvidia and Apple are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells NVDA or AAPL? Learn more now.

Markets compounded losses on Thursday afternoon after a van rammed into a crowd in Barcelona, reportedly killing at least 12 people and injuring as many as 32 others. Reports indicate the van had sped into a crowd along the tourist-heavy Las Ramblas avenue. The driver of the van fled the scene on foot after the incident. It is not known whether the attack is a terrorist attack, but police are treating it as such. Two arrests have been made.

In other earnings news, Walmart Stores Inc. (WMT) - Get Report , the world's largest retailer, reported a dip in quarterly earnings, though adjusted profit came in higher than expected. Earnings declined to 96 cents a share over the second quarter compared with $1.21 a share in the year-ago quarter. Adjusted earnings of $1.08 a share topped consensus by a penny.

Revenue increased 2.1% to $123.4 billion and exceeded estimates of $122.8 billion. Same-store sales climbed 1.8%. Sales at its membership-only Sam's Club stores rose by 2.3%, while traffic ticked up 2.1%.

The retailer anticipates third-quarter earnings between 90 cents and 98 cents a share. The low-end of full-year adjusted earnings was raised to $4.30 from $4.20 a share. Walmart now anticipates full-year adjusted earnings between $4.30 and $4.40 a share. Analysts had expected third-quarter profit of 97 cents a share and full-year profit of $4.36 a share.

Walmart shares, a Dow component, declined by 1.5%.

Alibaba Holding Ltd. (BABA) - Get Report offset some of Walmart's losses after better-than-expected earnings boosted its premarket performance. Per-share earnings increased 92 cents to 83 cents a share over its quarter ended June 30. Adjusted earnings of $1.17 a share topped estimates of 93 cents.

What does Alibaba actually do? Natalie Walters explains.

Sales surged 56% to $7.4 billion, higher than a targeted $7.12 billion. Revenue from the company's core commerce increased 58% year-over-year to $6.347 billion. Cloud computing revenue increased 96%. CEO Daniel Zhang said "technology is driving significant growth across our business and strengthening our position beyond core commerce."

Shares of the Chinese e-commerce company were up 2.8%.

L Brands Inc. (LB) - Get Report was the worst performer on the S&P 500 following a soft outlook. Third-quarter profit guidance of 25 cents to 30 cents a share came in below analysts' target of 36 cents. For the full year, the Victoria's Secret parent targets profit of $3 to $3.20 a share, under consensus of $3.22. L Brands had preannounced its second-quarter results. 

Here's why the market reacted negatively to Walmart's quarter.

Around 92% of S&P 500 companies have reported earnings so far this season. Of those, 73.7% have exceeded earnings estimates, above the historical average of 64%, according to Thomson Reuters data. More than 68% have topped revenue consensus, also above an average of 59%.

"Strong earnings continue to provide support for the stock market at elevated valuations, with the potential for more support from a reduced corporate tax rate next spring," Burt White, chief investment officer for LPL Financial, said in a note. "We believe near double-digit earnings growth is achievable this year (consensus expectations are roughly +10%) and potentially in 2018 as well."

Adding to market pessimism were worries over distractions to President Donald Trump's tax agenda. The topic has been brushed aside in the past two weeks with other crises cropping up: first, increasingly aggressive language exchanged between North Korea and U.S., and then, rising racial tensions at home following violence in Charlottesville, VA. 

A white supremacist and neo-Nazi rally on Saturday, Aug. 12, in Charlottesville escalated into violence as protesters and counter-protesters clashed, culminating in an intentional hit-and-run that killed one and injured at least 19 others. James Alex Fields Jr. has been charged with second-degree murder in the death of 32-year-old Heather Heyer.

Trump caused outrage in his response to the tragedy, appearing reluctant to call out the white supremacists who gathered in Charlottesville and instead blaming violence on "both sides." His moral equivalence earned him near-universal condemnation, including from many members of his own party and a number of prominent business leaders including Apple CEO Tim Cook. Resignations from his manufacturing council forced his hand in disbanding both that council and the Strategic and Policy forum on Wednesday afternoon. 

  • Gary Cohn's Exit From Team Trump Would Be a Major Blow to Wall Street

Investors continued to digest signs the Federal Reserve could begin to unwind its balance sheet as soon as its next meeting, a move that would have tightening effects similar to a rate hike.

In minutes from its July meeting out on Wednesday, Aug. 16, members of the Fed's monetary policy committee said they wanted to wait for an "upcoming" meeting to begin debt reduction. Several members were ready to announce a start date at the July meeting, indicating a willingness to take the first step soon, possibly in September as many economists anticipate.

The Fed had previously said it would implement changes to its balance sheet "relatively soon," provided the economy expands as expected. The central bank currently holds $4.5 trillion in Treasuries and mortgage-related bonds, purchased to buoy U.S. growth after the financial crisis.

Fed members also discussed concerns over inflation trends. Members said they could "afford to be patient ... in deciding when to increase the federal funds rate further" and that it was imperative to wait until "incoming information confirmed that the recent low readings on inflation were not likely to persist."

The central bank left the federal funds rate at 1% to 1.25% at that meeting, as widely expected. Another rate hike is not anticipated until at least December. Even then, chances of a year-end increase are only at 49.2%, according to CME Group fed funds futures.

"We know the Fed has a rate destination in mind, and a stated goal of three this year, but what remains to be seen is if they deliver this year or next," said Mike Loewengart, vice president of investment strategy at E*TRADE. "Many will be keeping a watchful eye on inflation. If we see improvement on that front, there's a good chance we'll see more action in 2017."

Jobless claims in the past week fell at a faster-than-expected pace. The number of new claims for unemployment benefits declined by 12,000 to 232,000, according to the Labor Department. Analysts expected claims to drop to 240,000 after a reading of 244,000 in the previous week.  

Business expectations in the Philadelphia region receded in August, though at a slower pace than anticipated. The August Philadelphia Fed Business Outlook dipped to 18.9 from 19.5 in July. Analysts expected a reading of 18. 

Industrial production came in weaker than anticipated in July. The Fed's measure increased 0.2% to a reading of 105.5 in July, slowing from a 0.4% pace in June. Analysts anticipated a 0.3% increase. 

Don't miss these top stories on TheStreet: