Wall Street lower on global economic worry; tech weighs

NEW YORK (Reuters) - Stocks declined on Thursday, with the S&P 500 and Nasdaq down more than one percent, as data pointing to an improvement in the labor market did little to shake investor pessimism about a faltering global economy.

Labor Department data showed initial claims for state unemployment benefits dropped 26,000 to a seasonally adjusted 350,000, the lowest level in four years.

Still, the data did little to alleviate concerns that a broader economic slowdown, indicated by other macroecnomic data and slowing global growth, could hurt corporate profits. These worries have sent the S&P 500 down 3.4 percent since July 3.

"We are still at 350,000, which is the least since March of 2008 but it is not effectively changing anything - the conversation, the approach, the market's outlook - nothing," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"Whether it is broader themes in employment, GDP, industrial production, housing - there is a lot there that speaks to a headwind that is going to take some very significant time and energy to get through - this (data) is not going to give us that kind of push."

U.S.-listed shares of Infosys Ltd tumbled 11.7 percent to $38.50 as the biggest percentage decliner on the Nasdaq 100 <.NDX>, after the Indian IT heavyweight cut its sales forecast more than expected, with technology spending hurt by global economic uncertainty.

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 <.GSPT> is down 4.1 percent and the PHLX semiconductor sector <.SOX> is off 8.8 percent.

The benchmark S&P index has finished lower for five straight sessions.

The Dow Jones industrial average <.DJI> lost 90.93 points, or 0.72 percent, to 12,513.60. The Standard & Poor's 500 Index <.SPX> dropped 13.59 points, or 1.01 percent, to 1,327.86. The Nasdaq Composite Index <.IXIC> fell 39.61 points, or 1.37 percent, to 2,848.37.

Hotel operator Marriott International Inc reported a higher quarterly profit after the close on Wednesday but saw weakness in some international markets. Its share price slid 4 percent to $36.50.

Chevron Corp , the second-largest U.S. oil company, said late Wednesday second-quarter profit would be higher than the previous quarter as improved refining margins offset lower oil prices. Shares edged up 0.5 percent to $105.41.

Supervalu Inc plunged 43.7 percent to $2.98 after the third-largest U.S. supermarket chain suspended its dividend and said it was mulling options for overhauling the firm, including a sale.

SAP AG was a bright spot as U.S.-listed shares of the German business software maker advanced 2.2 percent to $57.99 after it said second-quarter software revenues rose a currency-adjusted 19 percent, near the upper end of its targeted range and bucking a weakening trend among technology peers.

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

(Editing by Bernadette Baum)