Stocks shaved some of their earlier losses as financials gained but disappointing outlooks from the tech and consumer sectors weighed on the market.
The S&P 500and the Nasdaqwere also lower. The CBOE volatility index, widely considered the best gauge of fear in the market, fell slightly below 24.
Microsoft , Pfizer and Merck were among the Dow's top gainers. Merck is scheduled to report earnings on Friday.
St. Louis Fed President James Bullard, a voting member of the FOMC, rattled the market a litle after he said that the Fed may have to take the more severe measure of buying government debtif prices stay too low for too long, but said the risk of deflation is low.
Some market pros, like James Dailey, CIO at Team Asset Strategy Fund, cautioned that the current market is similar to the rally off the "Bear Stearns low" in March 2008.
“The euro crisis [is] similar to the Bear Stearns crisis where people thought it’s over,” Dailey told CNBC. “So the sovereign debt issues and the currency issues as we go forward are likely to re-emerge.”
Utilities, tech and consumer discretionary the worst performing sectors.
Trading in was halted briefly at 10:41 a.m. due to a 10 percent price spike within a five-minute trading period. NYSE Amex said all trades will stand after it had reviewed those executed at 10:41 a.m. between $23.67 and $26. The stock resumed trading at 10:46 a.m. Cisco did not provide any information.
Shares of Nvidia and Symantec plunged close to 10 percent after both chipmakers cut expectations for the next quarter. In addition, at least eight and five brokerages lowered their price targets on Nvidia and Symantec, respectively.
Among consumer stocks, Kellogg prices fell after the company posted lower-than-expected quarterly profitsand released a weak outlook.
Colgate-Palmolive tumbled more than 6 percent after the firm beat estimates and reaffirmed its outlook, but warned that currency devaluation in Venezuela would cause a greater impact than expected.
Visa also topped forecasts, but shares fell almost 5 percent after at least five brokerages lowered their price targets on the credit-card provider.
Energy stocks were mixed after strong earnings reports from energy producers, including ExxonMobil , the No. 1 company in market capitalization, and Royal Dutch Shell.
On Wednesday, ConocoPhillips reported a jump in second quarter income due to higher oil prices and bigger refining margins. And rival Chevron is expected to report earnings on Friday.