NEW YORK (CNNMoney.com) - Blue-chip stocks fell for the third straight session Thursday as concerns about inflation and interest rates persisted.

The Dow Jones industrial average (down 77.32 to 11,128.29, Charts) sank 0.7 percent after tumbling 214 points Wednesday, the blue-chip average's biggest one-day point decline in more than three years. The measure has fallen 300 points in the past three sessions.

The broader Standard & Poor's 500 (down 8.51 to 1,261.81, Charts) index and the Nasdaq composite (down 15.48 to 2,180.32, Charts) both slid about 0.7 percent.

The Nasdaq fell for the eighth straight session, its longest losing streak since September 1994, according to records obtained from Nasdaq.

Stocks managed modest gains early Thursday after the Labor Department said new jobless claims unexpectedly surged last week, a sign of possible slowing in the labor market, which gave investors reason to believe that the Federal Reserve might not hike interest rates next month after all.

Investors also welcomed a 0.1 percent decline in the Conference Board's index of leading indicators for April, which came in below estimates and supported the theory that economic growth wasn't hot enough to spark a sustained round of rising prices and wages.

But by late afternoon, the gains evaporated as investors struggled to shake off their latest case of inflation jitters, sparked by Wednesday's bigger-than-expected jump in consumer prices. (For more on the inflation outlook, click here.)

The selloff started last week after the Dow, the world's most widely watched stock market gauge, had come within about 80 points of its all-time high set in January 2000. The 30-share Dow is off over 4 percent since the selloff started.

After the closing bell, computer maker Dell (up $0.32 to $23.95, Research) rose nearly 4 percent after reporting that quarterly profit fell 18 percent, in line with expectations, and that it will use some AMD chips in servers for the first time.

Brocade Communications Systems (up $0.08 to $5.77, Research) posted a lower profit, but beat estimates, sending shares up 4 percent in after-hours trading.

And Gap (up $0.11 to $17.92, Research) reported a lower first-quarter profit on weak demand, but beat estimates, sending its stock up about 3 percent.

Declines were broad-based, with 23 of the Dow industrials' 30 shares falling.

Alcoa (down $0.85 to $31.31, Research) was the Dow's biggest loser, sliding 2.6 percent.

Elsewhere, Sears Holding (up $17.89 to $155.85, Research) jumped 13 percent after the owner of Sears and Kmart stores posted a quarterly profit compared with a year-ago loss and settled a $215 million lawsuit.

Shares of Limited Brands (up $1.38 to $26.68, Research) climbed 5.5 percent to an 18-month high after the operator of Victoria's Secret stores posted sharply higher quarterly profit.

BEA Systems (up $1.47 to $13.33, Research) gained 12 percent after the business software maker posted a higher quarterly net profit.

Shares of Dow component Hewlett-Packard (up $0.32 to $32.48, Research) added 1 percent after Morgan Stanley upgraded the computer maker to "equal weight" from "underweight."

And shares of Burger King (up $0.50 to $17.50, Research) rose 5 percent after the second-largest U.S. hamburger chain, priced its initial public offering at $17 a share, at the high end of its previously announced price range.

On the down side, Napster (down $0.72 to $3.21, Research) tumbled 18 percent after the online music service posted a narrower quarterly loss but issued a disappointing forecast for the current quarter.

And UnitedHealth (down $1.59 to $45.30, Research) lost 3 percent on news that Omnicare (up $0.06 to $55.01, Research), which supplies pharmaceuticals to nursing homes, is suing the health insurer for violating antitrust laws in contract negotiations and the company received a subpoena from the U.S. attorney's office of New York for documents relating to the granting of stock options.

Market breadth was negative. On the New York Stock Exchange, decliners topped advancers by five to three on volume of 1.8 billion shares. On the Nasdaq, losers beat out winners by a margin of three to two as 2.1 billion shares changed hands.

Treasury prices rallied, lowering the yield on the benchmark 10-year note to 5.06 percent, down from 5.16 percent Wednesday.

The dollar fell against the euro and the yen.

Crude oil for June delivery rose 76 cents to $69.45 a barrel on the New York Mercantile Exchange.

COMEX gold for June delivery lost $10.90 to $680.90 an ounce.

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