Wall Street slips as global growth concerns weigh

NEW YORK (Reuters) - U.S. stocks slipped on Thursday, led by losses in growth-related sectors as concerns about the faltering global economy and diminished chances of monetary stimulus from major central banks prompted investors to avoid risky assets.

Data showed initial claims for state unemployment benefits in the United States dropped to the lowest in four years, but that did little to ease concerns that a broader economic slowdown could erode corporate profits. Those worries have driven the S&P 500 down 2.7 percent since July 3.

Technology shares have been among the worst performers recently, bogged down by profit warnings from companies such as Advanced Micro Devices Inc and Applied Materials Inc . For the month, the S&P technology sector is down 4 percent and the PHLX semiconductor sector is off 8.7 percent.

U.S.-listed shares of Infosys Ltd tumbled 11.7 percent to $38.53, after earlier dropping to an all-time low of $38.12. The Indian IT heavyweight cut its sales forecast more than expected as technology spending was hurt by global economic uncertainty.

Echoing the view, BofA Merrill Lynch Global Research lowered its forecast on the S&P 500's 2012 earnings per share to $102 from $103.50, and for 2013, to $109 from $110.50.

The forecasts were cut "to reflect the impact of lower commodity prices and slower global growth on corporate profits," BofA Merrill Lynch Global Research said in a note.

"Although the bottom-up consensus forecasts have continued to drift lower since last summer," the note added, "they still appear too optimistic in light of the ongoing European crisis, the looming fiscal cliff and the slowdown in China."

The Dow Jones industrial average was down 3.71 points, or 0.03 percent, to 12,600.82. The Standard & Poor's 500 Index was down 4.23 points, or 0.32 percent, at 1,337.22. The Nasdaq Composite Index was down 19.77 points, or 0.68 percent, at 2,868.21.

Overall, market sentiment was weak, especially after the lack of any monetary easing by the Bank of Japan on Thursday, and few clues in the minutes from the Federal Reserve's June policy meeting, released on Wednesday. The lack of policy moves suggested major central banks were still cautious about the need for further easing.

A surprising rate cut in South Korea following Brazil's 50-basis-point cut underscored the growing impact of sluggish growth worldwide.

"Risk barometers are flashing red following further central bank moves to couch the slowing global economy," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

The CBOE Volatility index , Wall Street's fear gauge, was up 1.2 percent at 18.15. At its session high of 19.51, the VIX was up 8.7 percent from Wednesday's close.

Investors were looking to Friday's second-quarter gross domestic product data from China, the world's second-largest economy, for indications of the nation's economic health, in the wake of data in recent months showing its growth is losing steam.

A Reuters poll showed economists expect China's growth to have slowed to 7.6 percent in the second quarter, its worst performance since the 2008-2009 financial crisis. China's economy grew 8.1 percent in the first quarter.

Hotel operator Marriott International Inc reported a higher quarterly profit after Wednesday's close, but cut its fee revenue forecast due to weakness in some international markets. Its stock slid 5.6 percent to $35.89.

Chevron Corp , the second-largest U.S. oil company, said late Wednesday that second-quarter profit would be higher than the previous quarter as improved refining margins offset lower oil prices. Chevron's stock rose 0.5 percent to $105.39.

Supervalu Inc plunged 47.1 percent to $2.80 after the third-largest U.S. supermarket chain suspended its dividend and said it was mulling options for overhauling the company, including a sale.

Other economic data showed U.S. June import prices fell 2.7 percent, the most in more than three years, due to a plunge in the cost of imported oil, further icing inflation pressures.

(Additional reporting by Chuck Mikolajczak; Editing by Bernadette Baum and Jan Paschal)