US STOCKS-Markets down for third day on jobs data, Cisco

                                

                                
 * U.S. jobless claims rise unexpectedly in latest week
                                
 * Cisco's slumps after weak revenue forecast
                                
 * Indexes off: Dow by 0.6 pct, S&P 0.6 pct, Nasdaq 1 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
  (Updates to afternoon trading, changes byline)
                                
 By Ryan Vlastelica
                                
 NEW YORK, Aug 12 (Reuters) - U.S. stocks fell for a third
straight day on Thursday as a discouraging report on jobless
claims underlined the lack of progress in turning around the
anemic labor market.
                                
 A weak revenue outlook from networking giant Cisco Systems
Inc <CSCO.O> added to the bearish sentiment and sunk technology
stocks.
                                
 The number of U.S. workers filing new claims for
unemployment benefits rose by 2,000 in the latest week, sending
claims to a nearly six-month high. For details, see
[ID:nN1274714]
                                
 "Bears have the upper hand today because claims were so
much worse than expected," said Gary Flam, portfolio manager at
Bel Air Investment Advisors in Los Angeles.
                                
 "It adds to their case that we're not getting any jobs
growth, which means people won't be able to spend and the
economy won't be able to recover."
                                
 Cisco fell 9.5 percent to $21.46 and was the top drag on
both the Dow and Nasdaq. The computer networking group reported
fourth-quarter revenue that missed expectations and forecast
first-quarter sales below consensus. Several analysts
downgraded their view on the stock.
                                
 Concerns that tech spending would weaken was underscored by
comments from Cisco Chief Executive John Chambers, who warned
of "unusual uncertainty" about the economy. [ID:nN11174722]
                                
 Flam noted that Cisco's quarter included the month of July,
in contrast to companies whose quarters ended in June. "This
means the company has an extra month of insight, and it was a
month where economic activity slowed, something we could see
echoed by others in the future."
                                
 The Dow Jones industrial average <.DJI> was down 64.93
points, or 0.63 percent, at 10,313.90. The Standard & Poor's
500 Index <.SPX> dipped 7.02 points, or 0.64 percent, at
1,082.45. The Nasdaq Composite Index <.IXIC> dropped 21.53
points, or 0.97 percent, at 2,187.10.
                                
 Semiconductor stocks weighed on the Nasdaq after Cisco's
results and after BMO Capital Markets downgraded the sector to
"underperform" on concerns about rising inventories. Chip
stalwarts Intel Corp <INTC.O>, Texas Instruments Inc <TXN.N>
and Marvell Technology Group <MRVL.O> were all also downgraded.
[ID:nSGE67B0M4]
                                
 Texas Instruments fell 2.1 percent to $24.45, while one
semiconductor index <.SOX> fell 1.5 percent to 325.22.
Technicians are watching to see if the index closes under 324,
the low end of a recent trading range.
                                
 Thursday's drop comes a day after all three major indexes
posted their worst percentage declines in more than a month,
erasing gains for the year in the aftermath of a gloomier
outlook from the U.S. Federal Reserve.
                                
 The S&P 500 fell below its 50-day moving average of 1,088,
breaking a key technical support level that could exacerbate
the sell-off.
                                
 Kohl's Corp <KSS.N> tumbled 3.1 percent to $46.29 after the
department store chain gave a weak profit outlook.
[ID:nASA00NDB]
                                
 Food company Sara Lee Corp <SLE.N> slid 1.2 percent to
$14.30 after it posted an adjusted fourth-quarter profit below
expectations.
                                
 On the upside, General Motors Co [GM.UL] recorded its
biggest quarterly profit in six years on Thursday, a day ahead
of its expected filing for an initial public offering.
[ID:nN12271372]
  (Editing by Jeffrey Benkoe)