US STOCKS-Wall St ends lower for third day, Nvidia up late

                                

                                
 * Cisco's stock slumps after weak revenue forecast
                                
 * Telecoms rise in defensive move, buttressing losses
                                
 * Dow down 0.6 pct, S&P off 0.5 pct, Nasdaq off 0.8 pct
                                
 * For up-to-the-minute market news see [STXNEWS/US]
 (Updates close with Nvidia, Nordstrom earnings)
                                
 By Ryan Vlastelica
                                
 NEW YORK, Aug 12 (Reuters) - U.S. stocks ended down for a
third straight day on Thursday as an unexpected rise in
jobless claims and a sobering revenue outlook from Cisco
underscored the hurdles to economic recovery.
                                
 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.
                                
 Cisco Systems Inc <CSCO.O> fell 9.6 percent to $21.45 and
was the top drag on both the Dow and Nasdaq a day after it
forecast sales below consensus, prompting several analysts to
downgrade the stock. For details, see [ID:nN1298256]
                                
 The number of U.S. workers filing new claims for
unemployment benefits unexpectedly rose to nearly a six-month
high, increasing ongoing fears about the weak labor market. It
was the second straight week of increases. [ID:nN1274714]
                                
 Concerns that tech spending would weaken were underlined
by comments from Cisco's influential Chief Executive John
Chambers, who warned of "unusual uncertainty" about the
economy. [ID:nN11174722]
                                
 "The market is upset by all the uncertainty created by the
forecast, and that's weighing on the whole sector," said Janna
Sampson, co-chief investment officer at OakBrook Investments
LLC in Lisle, Illinois.
                                
 "Right now it isn't clear whether these issues are solely
related to Cisco, or if they'll hit names across the sector."
                                
 Telecom stocks advanced, with the S&P telecom services
sector <.GSPL> up 0.9 percent and Verizon Communications Inc
<VZ.N>, up 2.5 percent at $30.31, providing the biggest boost
to the Dow. The sector is generally considered a defensive
play.
                                
 The Dow Jones industrial average <.DJI> slipped 58.88
points, or 0.57 percent, to 10,319.95. The Standard & Poor's
500 Index <.SPX> dropped 5.86 points, or 0.54 percent, to
1,083.61. The Nasdaq Composite Index <.IXIC> tumbled 18.36
points, or 0.83 percent, to 2,190.27.
                                
 WHEN THE CHIPS ARE DOWN
                                
 Semiconductor stocks added to the Nasdaq's losses after
BMO Capital Markets downgraded the sector, along with
stalwarts Intel Corp <INTC.O> and Texas Instruments Inc
<TXN.N>, on concerns about rising inventories.
[ID:nSGE67B0M4]
                                
 Texas Instruments shares lost 2.2 percent to $24.41, while
one semiconductor index <.SOX> fell 1.3 percent.
                                
 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.
                                
 "All of this -- Cisco, the jobless claims -- is feeding
into the market's correct conclusion that the economy is
getting worse," said Chip Hanlon, president of Delta Global
Advisors in Huntington Beach, California.
                                
 BUT NVIDIA GAINS AFTER HOURS
                                
 After the closing bell, Nvidia Corp <NVDA.O> shares rose 6
percent to $9.50 in extended trading after the graphics
chipmaker reported its second-quarter results and gave a
third-quarter revenue outlook. [ID:nN12219868]
                                
 Nordstrom Inc <JWN.N> fell 4.5 percent to $31.95 after the
bell after the upscale retailer reported its second-quarter
results and affirmed its 2010 profit outlook. [ID:nN12134329]
                                
 Kohl's Corp <KSS.N> fell 2.7 percent to $46.50 after
giving a weak profit outlook. The S&P Department Store
sub-industry index <.GSPRETD> lost 1.7 percent.
[ID:nASA00NDB]
                                
 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]
                                
 Volume was light, with only 7.6 billion shares traded on
the New  York Stock Exchange, the American Stock Exchange and
Nasdaq, well below last year's estimated daily average of 9.65
billion.
                                
 Decliners outnumbered advancers on the New York Stock
Exchange by a ratio of 17 to 13, while on the Nasdaq, about
eight stocks fell for every five that rose.