Stocks headed for a weak start

NEW YORK (CNNMoney.com) -- U.S. stocks were headed for a lower start Thursday, following the previous day's sharp drop on fears of a global economic slowdown. Investors are also having to digest Cisco's cautious earnings outlook and an unexpected rise in jobless claims.

Dow Jones industrial average (INDU) S&P 500 (SPX) and Nasdaq (COMP) futures were down about 1%. Futures measure current index values against perceived future performance.

Stocks tumbled Wednesday, with the 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.

"The weakness we've been seeing in the markets will continue, given the focus on the bigger economic picture," said David Jones, chief makret stratagist at IG Markets in London. "But we shouldn't see a sharp drop like we did yesterday."

Jones said the trading day will likely be quiet as investors look ahead to key retail sales and inflation data due Friday, which could provide a boost of confidence on Wall Street, based on economists' expectations.

Economy: Initial jobless claims jumped unexpectedly to 484,000 last week, up 2,000 from an upwardly revised 482,000 the prior 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 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 are up 4.9% from a year ago. The advance was led by higher fuel prices.

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

Companies: Cisco Systems Inc. (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 Cisco's ability to continue to grow, 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 7.3% in pre-market trading.

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.

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 fell back into negative territory in afternoon trading, following a choppy morning session. Germany's DAX was down 0.7%, while the CAC 40 in France dropped 0.9%. The FTSE 100 in Britain turned down 0.4%.

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

Oil futures for September delivery fell $1.81 to $76.21 a barrel.

Gold futures for December delivery rose $15.90 to $1,215.10 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.