US STOCKS-Market rises on Cisco, lower oil; Nasdaq up 1 pct

(Updates with stocks extending gains)

NEW YORK, Aug 6 (Reuters) -U.S. stocks extended gains on Wednesday as a reassuring outlook from Cisco Systems (CSCO.O) and a further drop in the price of oil overshadowed nagging concerns about the housing slump.

The Nasdaq rose more than 1 percent.

Cisco, the largest U.S. maker of equipment that directs Web traffic, set the tone for technology shares after it posted a stronger-than-expected quarterly profit and said it expects the weak economic environment to be relatively short lived. Cisco's shares jumped 6 percent and were among the top boosts to the S&P 500 and the Nasdaq.

The decline in the price of oil helped the broader market recover from earlier losses sparked by home finance company Freddie Mac's (FRE.N) wider-than-expected loss.

The Dow Jones industrial average .DJI was up 34.52 points, or 0.30 percent, at 11,650.29. The Standard & Poor's 500 Index .SPX was up 3.10 points, or 0.24 percent, at 1,287.98. The Nasdaq Composite Index .IXIC was up 27.15 points, or 1.16 percent, at 2,376.98. (Reporting by Kristina Cooke; Editing by Leslie Adler)