NEW YORK?US stocks extended losses Thursday as data showing an unexpected rise in weekly jobless claims refueled recovery fears in the world's biggest economy.

The Dow Jones Industrial Average dropped 58.88 points (0.57 percent) to 10,319.95 in closing trades, after losing more than one percent in early trading. .

The tech-rich Nasdaq composite index slipped 18.36 points (0.83 percent) to 2,190.27 mostly on the back of Cisco System's stock falling 10 percent after presenting lower-than-expected quarterly profits.

The broader S&P 500 index fell 5.86 points (0.54 percent) at 1,083.61.

"There were some built-in skepticism over the market not advancing further in the month of August," said Marc Pado, US market strategist for Cantor Fitzgerald.

Data released before the market opened showed US jobless benefits jumped unexpectedly last week to the highest level in about six months, fueling concerns unemployment could dampen recovery.

Initial claims climbed by 2,000 to 484,000 in the week to August 7 from the previous week's upwardly revised figure of 482,000.

Most economists had expected 465,000 new claims.

On Wednesday, Wall Street nosedived as data showing the US trade gap had widened sharply in June -- to the highest level in 20 months -- piled on top of an already gloomy outlook by the Federal Reserve.

Stock markets across the world also slid on Thursday as many investors ditched risky assets in favor of safe-haven trades amid rising fears of a double-dip recession.

"The next few (trading) sessions should provide clues whether the pessimism has increased enough to contain stocks to a short-lived pullback, or whether the market is in for a longer, deeper pullback," Wells Fargo chief technical market strategist Scott Marcouiller said.

Other than Cisco, American cosmetics group Estee Lauder's shares also fell sharply, losing 2.6 percent after mixed fourth quarter results.

Retailer stores group Kohl's also dropped by 2.68 percent.

The bond market dropped. The yield on the 10-year Treasury bond rose to 2.735 percent from 2.685 percent Wednesday while that on the 30-year bond rose to 3.931 percent from 3.921 percent. Bond yield and prices move in opposite directions.