Stocks Pare Losses Amid Egypt News; Cisco Slips

Stocks shaved earlier losses to trade mixed Thursday after news that Egyptian President Hosni Mubarak will step down and as investors saw the weakness as a buying opportunity.

The Dow Jones Industrial Average was down almost 20 points, after squeezing out an eighth straight day of gainsin the previous session. But the index is still on pace for its 10th weekly gain in 11 weeks.

Cisco , Microsoft and Wal-Mart fell, while United Technologies and Intel were higher on the blue-chip index.

The S&P 500 and the Nasdaq wavered, briefly popping into positive territory. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 16.

Among the key S&P 500 sectors, techs, consumer staples and utilities were lower, while materials and consumer discretionary stocks were higher.

Overseas, Egypt's Hosni Mubarak is expected to step down tonight, and current vice-president Omar Suleiman will take over the presidency, sources told NBC News.

"I think it's a near-term net positive for the markets as it lowers the blood pressure on what was a very tense situation," David Joy, chief market strategist at Columbia Management told CNBC.

Middle East Turmoil
Middle East Turmoil

Meanwhile, some experts told investors to watch commodity prices.

"This is a commodity inflation issue that is running across the Middle East," Dan Dicker, senior contributor for The Street, told CNBC. "The government is getting involved and they're stockpiling right and left...this is the real issue that's going on in the Middle East and a simple regime change over in Egypt doesn't change that. The commodity trade is the one that you should be on."

The dollar continued to rise broadly following the news, while the euro slumped as investors worried about Europe's lack of progress in tackling a sovereign debt crisis.

In earnings news, Pepsi narrowly beat profit estimatesbut saw its shares slip on a disappointing outlook.

Cisco shares plunged more than 10 percent after the tech bellwether posted a better-than-expected profit after-the-bell Wednesday, but its revenue forecast was lower than expected while its margins came under pressure. In addition, at least two brokerages cut their price targets on the tech giant.

Also weighing on the tech sector, Akamai shares plummeted roughly 15 percent after the Internet delivery company said it expects current quarter results below expectations. In addition, at least three brokerages lowered their price targets on the company.

And Activision Blizzard shares slipped more than 5 percent after the videogame publisher's outlook missed expectationsand it will shut down the unit that makes "Guitar Hero" music games.

Credit Suisse shares tumbled more than 7 percent after the bank missed profit expectationsdue to debt charges and cut its return on equity target due to tighter capital regulations.

And Sprint's revenue rose 6 percentand it added mobile subscribers for the first quarter in more than three years, sending its shares up in pre-market trading.

Molson Coors posted a lower-than-expected quarterly profit as higher fuel and commodity costs and weak industry volume in its top three markets weighed on results.

Whole Foods soared more than 10 percent after the upscale grocer raised its 2011 profit outlook after a sharp acceleration in sales, diminishing fears of a growth slowdown. In addition, Jefferies raised its price target on the firm to $64 from $60.

Kraft and Expedia are slated to report earnings after-the-bell.

Gold prices fell below $1,360 an ounceafter the upbeat U.S. jobs news erased some investor appetite for perceived safe-havens.

The government is scheduled to auction 30-year bonds at 1pm ET.

In the day's economic news, new claims for jobless benefits fell more than expected last week to hit their lowest level in 2-1/2 years, according to the Labor Department, offering a glimmer of hope that the labor market was strengthening despite Januarys weak figures. Initial claims for state unemployment benefits fell 36,000 to a seasonally adjusted 383,000, the lowest since early July 2008.

Economists polled by Reuters had forecast claims slipping to 410,000. The prior weeks figure was revised up to 419,000, from the previously reported 415,000.

And wholesale inventories jumped 1 percent in Decemberto their highest level in almost two years while sales rose much less than expected, according to a government report. Business inventories rose to $430.5 billion, the highest since January 2009. The gain was greater than the 0.7 percent increase forecast by analysts polled by Reuters.

Foreclosures have continued to rise in January, jumping 12 percent, and more pain is ahead, according to a report by RealtyTrac.

And the average rate on the 30-year mortgage topped 5 percent this week for the first time since April. Higher rates could further hamper the struggling housing market ahead of the spring's prime home-buying season.

Shares of Beazer Homes , DRHorton and Pulte slipped.

In other news, the Financial Times reported that the SEC is probing whether traders were using ETFs to disguise insider trading by buying or selling the whole ETF containing a stock rather than just the stock.

On the M&A front, Facebook and Google have held low-key talks about taking over Twitter, according to the Wall Street Journal.

And NYSE Euronext confirmed it's in advanced talkswith Deutsche Boerse about a merger that would create the world's largest exchange by revenues. In addition, Sandler O'Neill raised its price target on NYSE Euronext to $43 from $37.

The decision of the merger came shortly after the London Stock Exchange agreed to buy TMX Group, the owner of the Toronto Stock Exchange, for $3.2 billion, and follows the Singapore Exchange's bid for Australia's ASX in October 2010.

Verizon started selling Apple's iPhone, ending rival AT&T's three-year exclusivity on the device in the U.S.

And Wells Fargo's former CFO Howard Atkins stands to walk away from the company with deferred compensation, pension benefits and stock grants valued at $27.21 million, CNBC has learned.

Coming Up This Week:

THURSDAY: Atlanta Fed speaks, 30-year Treasury bond auction, Treasury budget, Ebay investor day; Earnings from Kraft and Expedia.
FRIDAY: International trade, consumer sentiment, Nokia analyst day; earnings from Discovery Communications.

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