The Dow Jones industrial average lost 66.52 points, or 0.56 percent, to end at 10,664.11. The technology-laced Nasdaq Composite Index ended lower 34.13 points, or 1.64 percent, at 2052.55. The broader Standard & Poor's 500 index was lower 10.31 points, or 0.86 percent, to close at 1,191.99.
Trading was active, with about 1.51 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 1.96 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year.
Computer and printer maker Hewlett-Packard (search) announced before the bell that its embattled CEO was stepping down, effective immediately. Fiorina had been seen as a controversial figure since orchestrating HP's merger with Compaq Computer in 2002.
Stocks rose at the open on the HP announcement, which was seen as a welcome surprise. Hewlett-Packard shares soared 6.9 percent, or $1.39, to $21.53.
"There's not a whole lot of good news out there today," said David Memmott, head of listed block trading at Morgan Stanley. "We're three-quarters of the way through earnings period and the market's had a pretty healthy run over the past two weeks and it's now a bit of 'back and sell."'
"The biggest thing we had was Cisco, which is a bellwether technology, basically saying 'things are not robust, they're OK but they're less than expected', and the rest of the food chain is under pressure."
Investors were more concerned with Cisco's earnings and what they foreshadowed for the tech industry.
Cisco Systems Inc. (CSCO), the largest maker of communications gear that directs traffic over the Internet, said Tuesday quarterly earnings rose, but its stock slipped amid concerns about weak revenue and rising inventory. Cisco shares slipped 61 cents to $17.63.
Semiconductor stocks with exposure to Cisco were weak, including PMC-Sierra Inc. (PMCS), down nearly 5 percent, or 49 cents, at $10.00; Broadcom Corp. (BRCM), down nearly 4 percent, or $1.20, at $31.67, and Marvell Technology Group Ltd. (MRVL), down nearly 3 percent, or $1.02, at $34.58.
Other declining tech stocks included chipmaker Intel Corp. (INTC), a Dow component, down 11 cents at $23.30.
Government oil data also weighed on the market midday after a weekly government report showed a surprise drop of 1.0 million barrels in domestic commercial crude stocks against forecasts for a modest build.
Oil prices rebounded briefly after the government's weekly inventory figures showed a surprise 1 million barrel drop in crude inventories; analysts had expected a build of 730,000 barrels. Stores of distillate fuels, which include heating oil, also declined more steeply than expected. U.S. light crude settled up 6 cents to $45.46 a barrel, stripping away earlier gains of $1 immediately after the Energy Information Administration (search) report was released. In London, Brent crude rose 6 cents to $43.13 a barrel.
A run-up in Treasuries may also have worked against stocks, analysts said, noting that the yield on the 10-year note had slipped below 4 percent for the first time in more than three months, to 3.98 percent. Some of the buying was linked to the government's auction of $15 billion in five-year notes, but bonds had already been moving higher, perhaps due to Atlanta Federal Reserve President Jack Guynn's (search) suggestion in an interview with The Wall Street Journal that the group might need to change its policy statement as it adjusts the pace of interest rate hikes.
Other earnings in the spotlight Wednesday were AIG and Cigna. American International Group Inc. (AIG), the world's largest insurer by market value, reported better-than-expected earnings before the bell. AIG stock added $1.58 to $69.31.
Health plan Cigna Corp. (CI) posted sharply higher quarterly net profit, helped by a gain from the sale of its retirement benefits business. Shares were up $1.43 at $85.35.
Advanced Micro Devices (AMD) gained 30 cents to $17.94 after Morgan Stanley raised its rating on the chipmaker to "overweight" and set a 12-month price target of $25 on the stock. The brokerage said it expects AMD to cut or reduce its exposure to the low-margin flash memory business, and to gain market share.
Decliners outnumbered advancers on the New York Stock Exchange by about 2 to 1 and by about 3 to 1 on Nasdaq.
The Russell 2000 index, which tracks smaller company stocks, was down 13.01, or 2.04 percent, at 625.71.
Overseas, Japan's Nikkei stock average slipped 0.15 percent. In Europe, France's CAC-40 slid 0.28 percent, Britain's FTSE 100 fell 0.10 percent and Germany's DAX index declined 0.42 percent.
Reuters and The Associated Press contributed to this report.