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The Dow ended slightly lower, breaking an eight-day rally after network equipment maker Cisco Systems Inc (CSCO.O) gave a weak outlook.

The S&P and Nasdaq wavered in volatile late-day action as Mubarak began a speech in response to the weeks of civilian protests. Earlier in the day, as media reports spread that Mubarak might resign, equities rebounded off early lows sparked by the disappointment over Cisco.

"The moment Mubarak said he would be giving up duties to his vice president, the market said it was a good thing and rose," said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co in New York.

"There was an initial reaction that things would be better, but that doesn't seem to be the case," Holland added. Mubarak's speech enraged protesters, who reacted with chants of "Down, down Hosni Mubarak."

More than two weeks of civilian unrest in Egypt have created some uneasiness among global investors on fears that political instability could spread through the region and impact commodities.

The Van Eck Market Vectors exchange-traded fund (EGPT.P) ended up 0.45 percent, cutting gains late when it appeared that Mubarak was not stepping down. Previously, the fund had risen as much as 5.8 percent.

Volume on Wall Street was stronger than in recent days, which had seen some of the thinnest trade of the year. But with a total of about 8.15 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, volume was still below last year's daily average of 8.47 billion.

"Egypt stopped us from dropping lower, but the low volume means that people are skeptical of the climb we've had," said Michael Nasto, senior trader at U.S. Global Investors Inc in San Antonio, Texas. The Dow and S&P are both up more than 5 percent since the start of 2011.

Cisco shares tumbled 14 percent to $18.92 on heavy volume a day after the outlook, but chief competitors surged as investors see Cisco losing market share. Juniper Networks (JNPR.N) rose 7.6 percent to $43.40 and the Networking Index .NWX surged 3.5 percent.

The Dow Jones industrial average .DJI was down 10.60 points, or 0.09 percent, at 12,229.29. The Standard & Poor's 500 Index .SPX was up 0.99 points, or 0.07 percent, at 1,321.87. The Nasdaq Composite Index .IXIC was up 1.38 points, or 0.05 percent, at 2,790.45.

Also weighing on the Dow was Wal-Mart Stores Inc (WMT.N), which fell 2 percent to $55.59 after UBS downgraded the stock to "neutral" from "buy." UBS said a sales recovery at the retail giant could take longer than expected.

New U.S. claims for unemployment benefits dropped to their lowest level in 2-1/2 years, the government said on Thursday, in a sign the labor market was improving.

Kraft Foods Inc (KFT.N) fell in extended trading after it reported fourth-quarter results. The stock, a Dow component, was off 1.3 percent to $30.72.

Disappointing earnings overseas hurt sentiment as Credit Suisse (CSGN.VX)(CS.N) missed profit expectations. The bank's U.S.-traded shares dropped 7.2 percent to $43.27 while peer Deutsche Bank (DB.N) fell 2.6 percent to $62.61 on the New York Stock Exchange.

Both are relatively new chains that are rapidly adding more restaurants. They have found a following among diners who are willing to pay a bit more for quick meals made with upscale ingredients like naturally raised meats and artisan cheese.

Chipotle and Panera have chalked up 12-month gains of about 160 percent and 40 percent, respectively, on industry-leading sales trends, and investors have wondered how long their outperformance would last.

Chipotle, which features organic and natural ingredients, on Thursday said fourth-quarter sales at established restaurants jumped 12.6 percent, an acceleration from the 11.4 percent climb in the prior quarter.

The Denver-based burrito chain also reported quarterly profit that topped Wall Street's view and repeated its forecast of a low-single-digit percentage gain in 2011 same-store sales.

Shares in the company -- now facing a widening federal crackdown on its undocumented work force -- rose 8.6 percent to $278.80 in extended trading.

Panera, which serves lavish sandwiches, salads and pastries, said same-store sales at company-owned bakery-cafes rose 5.2 percent in the fourth quarter.

The company on Thursday reported fourth-quarter profit above analysts' average view, boosted its full-year earnings forecast and called for 2011 same-store sales growth of 4 to 6 percent. Panera's shares jumped 10.5 percent in extended trading.

Results from another high-flying restaurant chain, BJ's Restaurants Inc, disappointed with a quarterly profit that just matched Wall Street's view. Its shares, which are up 85 percent over the past year, fell 4.2 percent to $37.07.

The restaurant and brewery operator said sales at established restaurants rose 5.9 percent during the fourth quarter and were up by roughly the same amount so far this quarter.

California Pizza Kitchen Inc and Cheesecake Factory Inc also reported better-than-expected quarterly earnings on Thursday, but their sales trends lagged.

California Pizza Kitchen reported a 1.1 percent decline in sales at established full-services restaurants, while Cheesecake Factory said same-restaurant sales at its namesake eateries rose 1 percent. Shares in those chains were unchanged in extended trading.

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After years of cutting back, diners are venturing out for meals away from home more often. But consumer spending remains cautious and it's not yet known how much restaurant operators will be able to raise menu prices to offset higher costs for food like beef, dairy, cooking oil and produce.

Chipotle executives said they would likely raise menu prices later this year to cover their higher bill for food.

Investors wanted to see signs of continued strength in sales at established restaurants -- a benchmark for restaurant performance -- and got just that from Chipotle and Panera.

Shares in these restaurants have risen sharply this year on industry-leading gains in sales, and investors have wondered how long their outperformance could last.

Chipotle, which features organic and natural ingredients, said fourth-quarter sales at established restaurants jumped 12.6 percent, an acceleration from the 11.4 percent climb in the prior quarter.

Shares in the popular burrito chain, which also reported quarterly profit that topped Wall Street's view, rose 6.9 percent to $274.44 after it repeated its forecast of a low-single-digit percentage gain in 2011 same-store sales.

Chipotle's stock has chalked up a 12-month gain of almost 160 percent.

Panera's shares have risen 38 percent in the last 12 months. Panera, which serves lavish sandwiches, salads and pastries, said same-store sales at company-owned bakery-cafes rose 5.2 percent in the fourth quarter.

The company on Thursday reported fourth-quarter profit that beat analysts' average view, boosted its full-year earnings forecast and called for 2011 same-store sales growth of 4 to 6 percent. Its shares jumped 10.6 percent.

BJ's Restaurants Inc (BJRI.O), a restaurant and brewery, said sales at established restaurants were up 5.9 percent. It reported a gain of 6.7 percent for the third quarter.

But BJ's fourth-quarter profit just matched analysts' view, and shares in BJ's, which have gained about 85 percent over the last year, fell 4 percent to $37.09 in extended trading.

(Reporting by Lisa Baertlein and Renju Jose in Bangalore; Editing by Gary Hill)

No reason was cited for Warsh's decision. He joined the Fed on February 24, 2006, and will have served just over five years when he leaves at the end of March. His term was not due to expire until January 31, 2018.

A Fed official said Warsh had no immediate career plans after leaving the Fed.

The departure of Warsh, a former banker at Morgan Stanley, may tilt the balance of views at the Fed's influential Washington-based nucleus, favoring those who support further monetary easing if economic weakness persists.

The U.S. central bank is at a crucial, unprecedented juncture in its history. Having pushed interest rates all the way to zero in response to the worst recession in generations, the Fed has also made commitments to purchase a total $2.3 trillion in government and mortgage bonds.

Economists say history will judge the Fed not simply for its response to the crisis but in its ability to withdraw this stimulus in a timely manner, an issue that has been a high priority for Warsh.

While his public appearances and speeches were relatively infrequent, they often made a splash, as with a Wall Street Journal editorial piece expressing skepticism about the Fed's $600 billion bond-purchase program published just days after its launch in November.

Another key op-ed, back in September 2009, spooked financial markets by suggesting that the Fed's eventual exit from such extraordinary stimulus measures might be more rapid and abrupt than investors had been expecting.

A graduate of Harvard Law School, Warsh is among the Fed's richest top officials. Financial disclosures released in July stated that as of 2009, his wife Jane Lauder, granddaughter of the founder of the Estee Lauder cosmetics company, had assets worth at least $66.3 million. Warsh listed assets worth between $702,000 and $1.5 million.

Warsh's appointment by former President George W. Bush was seen as controversial at the time. Then 35, Warsh, whose background is in law rather than economics, was seen as lacking experience and being too politically connected to the Bush White House.

However, he emerged as a key player during the financial crisis, as Fed Chairman exploited Warsh's ties to the banking sector as a way to keep open communications between the central bank and key firms.

Along with former Fed Vice Chair Donald Kohn and Treasury Secretary Timothy Geithner, Warsh quickly became part of Bernanke's inner circle.

"Kevin rendered the Federal Reserve and the nation exemplary service during his time at the Board," Bernanke said in a statement. "In particular, his intimate knowledge of financial markets and institutions proved invaluable during the recent crisis.

"I deeply appreciate his insights and wise counsel and, most especially, his fortitude and friendship during the difficult days, nights and weekends of the crisis," Bernanke added.