(RTTNews) - After coming under pressure in early trading on Thursday, stocks have regained some ground over the course of the morning but remain mostly lower. Traders have largely shrugged off the lowest jobless claims number since July of 2008 amid disappointing earnings from Cisco Systems (CSCO).

The major averages have moved well off of their worst levels but currently remain in the red. The Dow is down 34.67 points or 0.3 percent at 12,205.22, the Nasdaq is down 7.82 points or 0.3 percent at 2,781.25 and the S& P 500 is down 3.15 points or 0.2 percent at 1,317.73.

Cisco is in traders' crosshairs this morning after reporting better than expected second quarter earnings but providing disappointing guidance.

The networking giant said it expects third quarter earnings of $0.35 to $0.38 per share, below analyst estimates for $0.40 per share. Cisco also said full year sales growth would be at the mid to low-end of its previous outlook.

In economic news released earlier, the Labor Department said that initial jobless claims fell by 36,000 to 383,000 in the week ended February 5th from the previous week's revised figure of 419,000. Economists had expected a much more modest decrease to 412,000.

However, the Labor Department indicated that the data was once again impacted by severe winter weather, which has contributed to significant volatility in the data in recent weeks.

Commenting on the data, Peter Boockvar, equity strategist at Miller Tabak, said, " Bottom line, smoothing out the data, initial claims are back to the low 400k's which points to further improvement (decline) in the pace of firings."

Separately, the Commerce Department said wholesale inventories rose by 1.0 percent in December after revised data showed that inventories were unchanged in November. Economists had expected inventories to increase by 0.7 percent compared to the 0.2 percent drop originally reported for the previous month.

Sector News

Gold stocks are under considerable selling pressure in the early going, with the NYSE Arca Gold Bugs Index posting a 1.6 percent loss. The weakness comes amid the day's U.S. dollar strength, which has sent the price of gold tumbling by $12.60 to $1,352.20 an ounce.

Telecom and internet stocks are also under pressure following the gloomy forecast from Cisco, while computer technology and healthcare provider stocks are also seeing moderate losses.

Despite the steep loss by Cisco, other networking stocks are moving higher, with Alcatel Lucent (ALU) leading the way after reporting better than expected fourth quarter earnings. The company also said it expects strong profit growth and market improvement in 2011

Oil service and biotechnology stocks are also moving higher, helping to offset some of the aforementioned weakness.

Stocks Driven By Analyst Comments

Watts Water Technologies (WTS) is trading higher after Brean Murray upgraded the stock from Hold to Buy. The stock is up by 4.3 percent and is on target for its best close since July of 2007.

Meanwhile BioMed Realty (BMR) is posting a notable loss after Stifel Nicolaus dropped its rating on shares from Buy to Hold. The stock is seeing a loss of 1 percent after setting its lowest intraday price since late November earlier on.

Life Time Fitness (LTM) is also under pressure after a downgrade at KeyBanc Capital Markets from Buy to Hold. Shares are down by 1.4 percent, falling further away from a recently set three-year closing high.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region saw a down day on Thursday. Japan's benchmark Nikkei 225 Index fell by 0.1 percent, while Hong Kong's Hang Seng fell by 2 percent.

The major European markets are also trading lower. The German DAX Index is down by 0.2 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 Index are both down by 0.7 percent.

In the bond markets, treasuries are showing modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is trading at 3.687 percent, posting a gain of 4.5 basis points.