NEW YORK (CNNMoney.com) – Stocks fell Thursday in a continuation of the previous day’s retreat, as investors digested an unexpected rise in jobless claims and Cisco Systems’ cautious earnings outlook.

The Dow Jones industrial average (INDU) lost 24 points, or 0.2%, about 1-1/2 hour into the session. The S&P 500 (SPX) fell 4 points, or 0.4%, and the Nasdaq (COMP) dropped 15 points, or 0.7%.

Stocks tumbled Wednesday, with the three major indexes losing more than 2.5%, after a report showed the U.S. trade gap widened and foreign data cast doubt on overseas demand for American goods.

“Cisco’s earnings were not good, and coupled with initial jobless claims, we have more signs that the recession is still upon us,” said Joseph Saluzzi, co-head of equity trading at Themis Trading.

Also continuing to drag down the market was the Federal Reserve’s statement from Tuesday, Saluzzi said. The central bank gave its most bearish outlook in more than a year, saying the economic recovery is weakening.

“People are paying a lot of attention to what the Fed says, so a negative outlook can really dampen the market for a few days,” Saluzzi explained “Two doses of bad news this morning just exacerbates the concern.”

Economy: Initial jobless claims jumped unexpectedly to 484,000 last week. That’s the highest number of claims filed since February. Economists were expecting claims to drop to 465,000.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, decreased to 4.45 million from 4.57 million the previous week. Economists were anticipating continuing claims to rise to 4.60 million.

A separate report showed that import prices jumped 0.2% in July from the prior month, and were up 4.9% from a year earlier. The advance was led by higher fuel prices.

Export prices fell 0.2% during the month, but were up 3.9% from 2009.

Companies: Cisco Systems (CSCO, Fortune 500) posted a 79% jump in quarterly profit late Wednesday, but the tech bellwether’s revenue missed Wall Street’s expectations. The company’s sales outlook was also a slight disappointment.

Cisco CEO John Chambers emphasized that while he is confident in his company’s ability to continue growing, concerns such as job creation and GDP growth still lurk, and the economy has been sending “mixed signals” to Cisco’s customers.

Shares of Cisco were down more than 9% in morning trading, dragging down the tech sector.

General Motors posted its second straight profitable quarter Thursday, with earnings of $1.3 billion after the payment of dividends on preferred shares held by the U.S. Treasury. That was a stark turnaround from the $12.9 billion it lost in the year-earlier period, when the company went into bankruptcy.

The results help put GM in position to move ahead with the sale of shares to the public, that is needed to repay taxpayer assistance it received last year.

Anxiety hangs over world markets
World markets: Markets in Asia couldn’t shake economic worries and extended losses. Japan’s benchmark Nikkei index fell 0.9%. The Shanghai Composite tumbled 1.2% and the Hang Seng in Hong Kong ended the day down 0.9%.

European shares turned mixed in late trading, following a choppy morning session. Germany’s DAX was down 0.5%, while the CAC 40 in France dropped 0.6%. The FTSE 100 in Britain turned up 0.1%.

Currencies and commodities: The dollar gained against the euro, the U.K. pound, and the Japanese yen.

Oil futures for September delivery fell $1.43 to $76.59 a barrel.

Gold futures for December delivery rose $16.50 to $1,215.70 an ounce.

Bonds: Prices for Treasurys were higher. The yield on the 10-year note fell to 2.71% from 2.72% late Wednesday. Bond prices and yields move in opposite directions. The U.S. will offer $16 billion worth of 30-year bonds later in the day.

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