August 15, 2013 / 4:15 PM / 4 years ago

US STOCKS-Wall Street drops, weighed by Wal-Mart, Cisco

* Jobless claims near six-year low in latest week

* Wal-Mart shares fall after results

* Cisco drags down technology shares

* Indexes down: Dow 1.4 pct, S&P 1.4 pct, Nasdaq 1.6 pct

By Havovi Cooper

NEW YORK, Aug 15 (Reuters) - U.S. stocks fell on Thursday, as investors weighed disappointing results from blue chips Wal-Mart and Cisco, along with sturdy economic data that looked set to place the Federal Reserve on a path soon toward scaling back its stimulus.

Wal-Mart shares fell 2.3 percent to $74.62 after the discount retailer posted disappointing same-store sales and missed revenue estimates for a fifth consecutive quarter. The company also lowered its revenue and profit forecasts for the year.

“The Wal-Mart earnings report is as big a macro indicator as (gross domestic product data),” said Nicholas Colas, chief market strategist at ConvergEx Group in New York.

“It shows that (consumer spending) isn’t that strong yet - inflation is rising, wages are not, unemployment is still pretty high and that’s not a recipe for a strong retail environment.”

Consumer prices rose broadly in July and new claims for jobless benefits fell to a near six-year low last week, which could draw the Fed closer to trimming its $85 billion monthly bond-buying program. The stimulus measures have lifted stock markets this year and kept interest rates low.

On Thursday, U.S. Treasury yields hit two-year highs as market participants focused on how soon the Fed will scale back its stimulus program, in the wake of more encouraging data.

The technology sector was the biggest laggard in the S&P 500, weighed by a slump in shares of Cisco Systems. The network equipment maker said Wednesday it will shed 4,000 jobs, or 5 percent of its workforce, to reduce costs. Shares declined 7.2 percent to $24.47 as a slew of brokerages cut their price targets on the stock.

The Dow Jones industrial average fell 213.78 points, or 1.39 percent, to 15,123.88, the S&P 500 lost 23.69 points, or 1.41 percent, to 1,661.7 and the Nasdaq Composite dropped 59.244 points, or 1.61 percent, to 3,610.03.

Trading volume has been low, as it tends to be in August, and will likely continue to be lackluster as earnings season winds down.

One of the few bright spots in retail earnings was Kohl’s , which reported a rise in quarterly same-store sales, sending its stock up 5.5 percent to $53.65.

Billionaire investor George Soros added another 2 million shares to his already large investment in struggling retailer J.C. Penney, a recent regulatory filing showed. The retailer’s stock was up 3.6 percent at $13.59.

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