NEW YORK (CNNMoney.com) -- Stocks slumped Thursday morning, building on the previous session's slide, as investors fretted about the threat of rising inflation amid a slowing economy.

The Nasdaq composite (down 18.18 to 2,149.66, Charts) lost around 0.7 percent an hour into the session. The Dow Jones industrial average (down 58.83 to 11,347.37, Charts) and the broader Standard & Poor's 500 (down 6.68 to 1,293.58, Charts) index both slipped around 0.5 percent.

Stocks slumped Wednesday after a surprise jump in unit labor costs in the day's second-quarter productivity report sparked worries about wage inflation.

Such worries remained in place Thursday morning and were compounded by concerns about the slowing economy.

To that effect, a pair of home building companies issued profit warnings, reflecting the cooling in the housing market and the broader slowdown in GDP growth.

Both KB Home (down $1.33 to $39.06, Charts) and Beazer Homes (down $2.32 to $36.05, Charts) warned about their fiscal-year results, sending shares lower.

A pair of tech stocks also issued profit warnings. Palm (down $1.39 to $14.14, Charts) said that revenue in its just-completed quarter will miss previous forecasts, due to lower shipments of its Treo smart phone.

ATI Technologies (down $0.15 to $21.25, Charts), a graphics chipmaker, warned that revenue in its just-completed fiscal fourth-quarter will miss forecasts, due to lower sales of its chipsets for Intel (down $0.20 to $19.11, Charts) processors. The company is being bought by Intel rival Advanced Micro Devices (down $0.36 to $24.17, Charts).

Meanwhile, Hewlett-Packard (down $0.39 to $35.45, Charts) inched lower on news that California's attorney general's office is investigating the legality of how the company traced the phone records of its board of directors.

Market breadth was negative. On the New York Stock Exchange, losers topped winners three to one on volume of 300 million shares. On the Nasdaq, decliners topped advancers by more than two to one on volume of 430 million shares.

U.S. light crude oil for October delivery gained 5 cents to $67.55 a barrel on the New York Mercantile Exchange, fluctuating after the release of the weekly oil inventory report.

Treasury prices dipped, as traders continued to take profits off the recent run. The decline raised the yield on the 10-year note to about 4.80 percent from 4.79 percent late Wednesday. Bond prices and yields move in opposite directions.

COMEX gold for December delivery fell $18.30 to $623.50 an ounce.

More on the markets

Uh oh, here comes September

Is the Fed really done?

Worried about the economy