NEW YORK (

TheStreet

) -- Stocks fell into negative territory and stayed there through the close Thursday as a surprise rise in initial jobless claims and disappointing numbers from

Cisco

(CSCO) - Get Report

added to the string of signs pointing to a faltering in the pace of economic recovery.

The

Dow Jones Industrial Average

lost 59 points, or 0.6%, to 10,320. The

S&P 500

shed 6 points, or 0.5%, to 1084 and the

Nasdaq

shed 18 points, or 0.8%, at 2190.

"The markets are reflecting a tremendous amount of uncertainty and nervousness from that uncertainty since the last couple of weeks have brought a string of unsettling news. Just this week, the Fed said it's unsure about the future," said Mike Schenk, senior economist at the Credit Union National Association.

"The news today, particularly jobless claims, isn't going to help markets at all," he said, adding that it's becoming increasingly apparent to markets that the recovery won't be expressing itself any time soon.

Industrial production in the eurozone slipped 0.1% in June as Germany and France suffered steep declines of 0.5% and 1.6%, respectively.

Overseas, Hong Kong's Hang Seng dropped 0.9% and Japan's Nikkei also fell 0.9%. The FTSE in London inched 0.4% higher, while the DAX in Frankfurt shed 0.3%.

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The Economy

Initial weekly jobless claims unexpectedly rose by 2,000, to 484,000 in the week ended Aug. 7, upsetting market expectations for a decline to 465,000, according to Briefing.com.

The Labor Department's Bureau of Labor Statistics said export prices fell 0.3% in July after slipping 0.7% in June while import prices increased 0.2%, after dropping 1.3% in June. Excluding volatile agricultural prices, export prices lost 0.2% and imports, excluding oil prices, declined by 0.3%.

The Energy Information Administration said natural gas storage levels gained 37 billion cubic feet in the week ended Aug. 6, which was above the injection range of 32 to 36 billion cubic feet that analysts polled by Platts had been expecting.

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Company News

After the closing bell, retailer

Nordstrom

(JWN) - Get Report

reasserted its 2010 earnings outlook while also saying it earned 66 cents a share in the second quarter, which matched analysts' estimates.

Revenue growth and better-than-expected bottom-line results, reported after the closing bell to the tune of 36 cents a share in the second quarter, was helping shares of

Autodesk

(ADSK) - Get Report

advance in the extended-trading session.

Cisco,

American Express

(AXP) - Get Report

and

Caterpillar

(CAT) - Get Report

were the Dow's biggest laggards while

Verizon

(VZ) - Get Report

,

Travelers

(TRV) - Get Report

and

Pfizer

(PFE) - Get Report

showed the best gains.

A day ahead of an

expected initial public offering filing,

General Motors

said CEO Ed Whitacre will step down on Sept. 1, and be succeeded by board member Dan Akerson, according to

CNBC

. Also on Thursday, the automaker reported a second-quarter profit of $1.3 billion, up from its first-quarter earnings of $865 million, and marking the company's largest profit since 2004. Second-quarter sales rose 5.4% on sequential basis to $33.2 billion.

Shares of

Cisco Systems tumbled 10% to $21.36 after the networking equipment giant topped profit estimates by a penny but fell short of revenue expectations with sales of $10.8 billion. Cisco also forecast sales growth of between 18% and 20% in the first quarter, a view that would miss consensus estimates for revenue of $10.95 billion.

Strong same-store sales in Canada helped

Tim Hortons

(THI)

beat profit expectations with a 21% increase in second-quarter earnings. The quick-service restaurant operator's stock gained 6.5%, to $36.14.

In other earnings news,

Kohl's

(KSS) - Get Report

beat profit expectations by 2 cents with earnings of 84 cents a share and said sales grew 8%, to $4.1 billion, but the company trimmed the high-end of its guidance and the stock was losing 3.2%, to $46.23. Kohl's now expects year-end earnings in the range of $3.57 to $3.70 a share, reflecting a reduction on the top end from its previous range of $3.57 to $3.75 a share.

Sara Lee

(SLE)

swung to a profit in the fourth quarter, reporting adjusted earnings of 19 cents a share and sales that were 4.2% higher at $2.8 billion. The results compared to analysts' projections for a profit of 16 cents a share on sales of $2.86 billion. The company expects full-year adjusted earnings from continuing operations of between 88 to 95 cents a share on sales of between $11.2 billion and $11.5 billion. The outlook compares with Wall Street's current expectation for a profit of 94 cents a share on sales of $10.97 billion. The stock shed 0.7%, to $14.37.

Wendy's/Arby's Group

(WEN) - Get Report

missed consensus estimates by 2 cents with a second-quarter profit of 3 cents a share on sales of $877 million, which met expectations. Shares fell 0.2%, at $4.14.

In other news, a top aide to former

Hewlett-Packard

(HPQ) - Get Report

CEO Mark Hurd has resigned, according to

Fortune

. Hewlett-Packard's stock shed 1.6%, to $40.14.

India gave

Research in Motion

(RIMM)

until August 31 to provide officials with access to the company's services in the country, according to an

Associated Press

report, otherwise India said it would obstruct RIM's e-mail capabilities.

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Commodities and the Dollar

Following the EIA report, natural gas for September delivery finished 3 cents higher, to settle at $4.30 per million British thermal units. Meanwhile, crude oil for September delivery settled at $75.74 a barrel after losing $2.28.

Elsewhere in commodity markets, the December gold contract gained $17.50 to settle at $1,216.70 an ounce.

The dollar was trading higher against a basket of currencies, with the dollar index up by 0.4%.

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>>The Economy

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Treasuries

The benchmark 10-year Treasury was down by 12/32, lifting the yield to 2.747%.

The two-year note was lower by 2/32, raising the yield to 0.549%. The 30-year bond was down by 11/32, strengthening the yield to 3.946%.

--Written by Melinda Peer and Sung Moss in New York

.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.