Stocks extend losses after disappointing unemployment data, revenue figures from Cisco

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Stocks fall after Cisco earnings, jobless data

NEW YORK — Technology companies led the stock market to its third straight loss Thursday after an earnings report from Cisco Systems raised more questions about the economy.

Cisco Systems Inc.’s revenue from its latest quarter and its forecast for future revenue fell short of analysts’ expectations. Stocks also fell after the Labor Department reported that the number of people filing for unemployment benefits for the first time rose last week to 484,000. Economists expected the number to drop.

The Dow Jones industrials fell 58, or 0.6 percent, to 10,319. The Standard & Poor’s 500 index fell 5, or 0.5 percent, to 1,083. The Nasdaq composite index fell 18, or 0.8 percent, to 2,190.

Losing stocks were again of gainers by 2 to 1 on the New York Stock Exchange. Volume came to 1 billion shares.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Technology companies led the stock market to its third straight loss Thursday after Cisco Systems’ earnings report raised more questions about the economy.

Trading is quieter Thursday than a day ago, when the Dow Jones industrial average fell 265 points. But investors are still showing concern about the economy.

Stocks fell after the Labor Department reported that the number of people filing for unemployment benefits for the first time rose last week. Economists expected the number to drop.

The latest earnings reports are adding to the market’s dark mood. Cisco Systems Inc.’s revenue from its latest quarter and its forecast for future revenue fell short of analysts’ expectations. Sara Lee Corp.’s revenue also missed forecasts.

The Dow is down 43, or 0.4 percent, at 10,335. The Standard & Poor’s 500 index is down 5, or 0.5 percent, at 1,084. And the Nasdaq composite index is down 15, or 0.7 percent, at 2,193.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stocks fell for a third day Thursday as more disappointing earnings and economic news flowed in.

The Dow Jones industrial average fell more than 60 points after the Labor Department reported that the number of people filing for unemployment benefits for the first time rose last week to 484,000. The gain was small at 2,000, but economists had expected the number to drop. The news pointed to continuing weakness in the labor market, yet another sign that the economic recovery is weakening.

The latest earnings reports added to the market’s darkening view of the economy. Cisco Systems Inc.’s revenue from its latest quarter and its forecast for future revenue both fell short of analysts’ expectations. The company’s stock fell more than 9 percent and other tech stocks also fell.

Peckham said investors also reacted to comments by Cisco CEO John Chambers, who said late Wednesday, “We think the words ‘unusual uncertainty’ are an accurate description of what’s occurring” in the economy. Chambers echoed the words chosen by Federal Reserve Chairman Ben Bernanke last month.

Technology stocks were the worst performer Thursday among the nine sectors that make up the Standard & Poor’s 500 index. The tech sector fell 1.15 percent. Cisco was down 10 percent. Microsoft Corp. was down 1.5 percent, and Oracle Corp. fell 3 percent.

Other big stocks seen as vulnerable in a weak economy also fell. Shipper FedEx Corp. lost 1.4 percent and heavy equipment maker Caterpillar Inc. fell 1.8 percent. Health care companies, called defensive stocks because they are likely to do well in a weak economy, were among the day’s winners.

Analysts say investors don’t have a sense of whether the recovery will hold. The uncertainty has led to heavy selling, but many traders are staying out of the market altogether and not making any moves. That has made trading volume even lighter than usual during July and August.

In early trading Thursday, the Dow fell 66.22, or 0.6 percent, to 10,312.61. The Dow fell almost 320 points over the course of Tuesday and Wednesday.

The Standard & Poor’s 500 index fell 8.04, or 0.7 percent, to 1,081.43. The Nasdaq composite index fell 25.13, or 1.1 percent, to 2,183.50.

Losing stocks were ahead of gainers by about 3 to 1 on the New York Stock Exchange, where volume came to 228 million shares.

Interest rates rose slightly in the Treasury market after falling sharply Wednesday, when investors were seeking the safety of government securities. The yield on the 10-year Treasury note, which rises as its price falls, was 2.72 percent, up from late Wednesday’s 2.69 percent.

Markets in Europe fell after the U.S. unemployment news. In London, the FTSE-100 index fell 0.1 percent in afternoon trading. Germany’s DAX index was down 0.4 percent, while the CAC-40 index in Paris was down 0.8 percent. Earlier, Japan’s Nikkei index closed down 0.9 percent.

In other earnings news, General Motors Co. reported net income of $1.33 billion in the April-June quarter, its second straight quarterly profit. The company, which is 61 percent owned by the federal government, is moving toward a public offering of its shares. The company also announced that CEO Ed Whitacre will step down Sept. 1 and be replaced by GM board member Daniel Akerson, the managing director and head of global buyout for The Carlyle Group, a private equity firm.

Cisco fell $2.37, or 10 percent, to $21.36. Microsoft Corp. was off 34 cents, or 1.4 percent, at $24.52.

Sara Lee fell 37 cents, or 2.6 percent, to $14.10, while Kohl’s fell $1.63, or 3.4 percent, to $46.15.