U.S. stocks fell on Thursday, led by technology losses as Cisco Systems Inc's weak outlook fueled worries that economic softness will hurt profits.

Cisco's shares lost 16 percent to $20.57 after the Internet network product provider's CEO, John Chambers, cautioned about "short-term challenges" in Europe and public-sector spending. Late Wednesday, the company forecast revenue and earnings well below estimates.

On a percentage-loss basis, if Cisco closes at that level, this would be the worst one-day percentage drop since July 14, 1994, when Cisco slid 17.71 percent, according to Thomson Reuters Datastream.

Howard Silverblatt, an analyst at Standard & Poor's, said this was set to be the biggest one-day dollar loss ever for Cisco's stock.

By early afternoon, 385 million shares of Cisco had traded, making this one of the 10 busiest days in the history of the stock.

The warning from Cisco also dragged down shares of other tech heavyweights: Microsoft, down 1.7 percent at $26.48; Hewlett-Packard, down 3 percent at $42.83, and Juniper Networks, down 0.4 percent at $34.40. The drop in Cisco's stock reduced its own market value by about $21 billion in early trading, according to S&P.

The Dow Jones industrial average .DJI fell 91.27 points, or 0.80 percent, to 11,265.77. The Standard & Poor's 500 Index .SPX shed 7.73 points, or 0.63 percent, to 1,210.98. The Nasdaq Composite Index .IXIC dropped 27.85 points, or 1.08 percent, to 2,550.93.

Analysts saw the outlook as worrisome, particularly since profit growth for technology companies this reporting period has outperformed the broader S&P 500.

Wal-Mart Stores Inc. may fail to turn its sales around by the holiday season as planned since the discount retailer has yet to lure customers back from rival outlets, according to Cleveland Research Co.

Store traffic has declined and is unlikely to recover in the next two months, Cleveland analyst Jeff Stinson said in a report yesterday. The Bentonville, Arkansas-based company also has had to cancel some promotions to “protect” profit margins, he said.

That evidence suggests Wal-Mart won’t revive sales at U.S. stores open at least a year by the fourth quarter as Chief Executive Officer Mike Duke predicted, Stinson said. Duke aims to attract shoppers by bringing back products the retailer had removed, revamping promotional displays, and offering free shipping to homes on thousands of holiday items.

Wal-Mart’s U.S. same-store sales have declined for five straight quarters. The world’s biggest retailer, which faces increasing competition from dollar stores and SuperValu Inc.’s Save-A-Lot discount grocery chain, is scheduled to report third- quarter results next week.

Greg Rossiter, a spokesman for Wal-Mart, declined to comment on the Cleveland report.

The free shipping offer, which applies to almost 60,000 products including furniture, jewelry and video games, is on now through Dec. 20, the company said today in a statement. It isn’t valid on Apple Inc.’s iPod and iPad devices.

Beazer Homes USA, Inc. is selling $200 million worth of senior notes in a private offering. Proceeds from the notes, which are due in 2019, will replenish cash that was already used to fund prior redemptions and repurchases of its outstanding senior notes, according to a company statement.

Beazer Homes is a single-family homebuilder based in Atlanta, Ga. In late-August, a former executive was indicted on accounting fraud and conspiracy to commit securities fraud. Beazer reported a net loss of $59.5 million in the fourth quarter and a net loss of $39 million for the fiscal year. Comparatively, the firm reported a net gain of $33.87 million in 4Q09 and a net loss of $189.4 million for the fiscal year 2009.

Shares Radian Group Inc. tumbled Monday after the mortgage insurer announced a public offering of convertible notes and disclosed it received a government subpoena.

Radian said it's publicly offering up to $350 million in convertible senior notes due 2017. The underwriters have the option to buy an additional $52.5 million of notes. The company said it plans to enter in a "capped call" to prevent the dilution of its shares once the debt is converted to stock.

But that did little to ease investor concerns. The stock of the Philadelphia company dropped $1.16, or 12 percent, to $8.79 in early afternoon trading.

The company also said Monday in a Securities and Exchange Commission filing that it received a subpoena from the U.S. Department of Housing and Urban Development asking for information on the company's captive reinsurance.

Under certain so-called "captive reinsurance" programs, insurers and lenders share premium revenue but also split exposure to any losses when borrowers default. Insurers take the primary loss, and lenders bear secondary exposure up to certain limits, after which insurers are saddled with the additional losses.

The Dow Jones industrial average rose 13 points in morning trading, again putting it in range to close at its highest level in more than two years. Broader indexes were mixed.

By the end of the trading day, investors will likely know exactly how much the Fed plans to spend to stimulate the economy. The central bank has hinted for two months it plans to buy Treasurys to drive interest rates lower in an attempt to spark lending and spending. However, there was still plenty of debate about the size and length of the program, particularly in the past few days.

The Fed is expected to announce details of its plan when it wraps up its meeting Wednesday afternoon. Treasury prices rose slightly, sending interest rates lower ahead of the announcement.

The Dow rose 12.75, or 0.1 percent, to 11,201.32 in morning trading.

The has been flirting with its highest closing level of the year, which was 11,205.03 on April 26. If it can close above that level, it would be the Dow's best finish since September 2008, just before the financial crisis peaked.

The Standard & Poor's 500 index rose 0.75, or 0.1 percent, to 1,194.32, while the Nasdaq composite index fell 0.36, or less than 0.1 percent, at 2,533.16.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.56 percent from 2.59 percent late Tuesday.

Key economic reports that would have normally affected trading are being overshadowed by the Fed's meeting.