(Updated from 4:14 p.m. ET)

A whole lotta stocks closed in the red today, with tech stocks bearing the brunt of the pain in the wake of

Cisco's

(CSCO) - Get Report

quarterly report. Meanwhile, traders started gearing up for the

Federal Reserve meeting next week, which is expected to bring further interest-rate cuts.

The networking giant posted its first-ever quarterly loss and offered a lukewarm

outlook about its near-term prospects. Strength in defensive stocks, meanwhile, kept the

Dow Jones Industrial Average from going as low as the

Nasdaq.

The question is whether the market has already priced in the half-point interest rate cut many investors expect next week. Investors are also weighing whether the major stock market indices can break through upper resistance levels -- technical levels above which it could be hard for them to pass. For the Dow, that

level is now 11,000. For the Nasdaq, it's 2200.

One trader interviewed said the market was trendless today and that it will stay that way for the near term. He said it might be good to stay out of the market ahead of next Tuesday's Fed meeting. "The market is very unpredictable here -- absolutely trendless," said Tom Gallagher, head of U.S. equity sales at

CIBC World Markets

. "There's no follow-through on the downside, but we're hitting resistance on the upside. If the April rally keeps up through next week, the

Fed meeting will be a good time to short the market."

Last night, Cisco CEO John Chambers, once an eternal optimist, called the valley in the U.S. economy "much deeper than any of us anticipated," worrying investors who have been banking on an economic rebound in the second half of this year. In a conference call following its earnings release, Chambers carped about the global economy and weak capital expenditures -- and detailed how an unfolding price war is sapping margins in his business. Cisco closed off by 6.1% to $19.13.

Investors are hoping that Friday's release of

wholesale prices

will allay concerns that inflation is rising, thus keeping hopes for the 50 basis-point cut alive (vs. the previously expected 25 basis-point cut). Last Friday, investors interpreted a weak employment report as an indication that the Fed would continue to cut interest rates aggressively. It has already cut the

federal funds target rate -- the overnight rate that banks charge each other -- four times this year. Lower interest rates make borrowing cheaper for consumers and companies, encouraging them to spend more.

Stocks have been marching higher since early April, boosted by investor sentiment the economy is improving, hope the Fed will keep cutting rates and a belief the worst of corporate earnings news is largely in the past. The Nasdaq, while still in the hole 11% for the year, is up 34% since dipping to its recent low of 1638.8 on April 4. The Dow has climbed 16% since its recent trough on March 22 and is in the black for the year -- up 0.9%. The S&P 500, modestly off Tuesday, is up 13% since March 22. Still, the broad index is down 4.5% since Jan 1.

"We're running into a wall at 11,000 on the Dow, but the question is, are we still in a buy the dip mentality?" asked Sam Ginzburg, senior managing director of equity trading at

Gruntal

.

Chipmakers were sagging today, but don't blame

National Semiconductor

(NSM)

. The company warned yesterday after the market close that it would miss its fiscal fourth-quarter earnings targets, revising them downward to between a 4 cent loss and break-even. The company also said it would slash about 1,100 jobs, or 10% of its workforce. National Semiconductor closed flat at $25.

Intel

(INTC) - Get Report

was lower -- it closed down 5.2% to $29.85 -- along with other chip names. The

Philadelphia Stock Exchange Semiconductor Index

was falling 3.4%. Analysts have been duking it out in the past month over whether the sector has put the worst of the slowdown behind it. The chip sector, which rallied smartly during April, has since trimmed some of those gains.

Retail and Internet stocks also fell.

Intel was one of the stocks dragging on the Dow. But

Procter & Gamble

(PG) - Get Report

,

Merck

(MRK) - Get Report

and

Alcoa

(AA) - Get Report

were among the companies that helped the blue-chip index.

Bond prices were rising.

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