Aug. 12 (Bloomberg) -- U.S. and Asian stocks fell and oil dropped after American jobless claims unexpectedly jumped, adding to evidence the economic recovery is weakening. Cisco Systems Inc. tumbled after forecasting sales that missed analysts’ estimates. The Swiss franc and gold rose. The Standard & Poor’s 500 Index slipped 0.6 percent at 11:13 a.m. in New York. Germany’s DAX Index and the CAC 40 Index in Paris lost 0.4 percent. Oil dropped below $77 a barrel, while the franc appreciated against all of its 16 most-traded peers. Stocks plunged yesterday, sending the MSCI World Index to its biggest drop since June, on concern the U.S. recovery is faltering. The jobless report today signaled investors are still concerned that the recovery is unwinding. “We’re in a choppy and corrective phase in the market,” said David Darst, the New York-based chief investment strategist at Morgan Stanley Smith Barney, which oversees $1.6 trillion. “Everyone knows the jobs situation is bad while it is company profits that have helped the market, so if profits step off the gas then that’s a tough thing for investors.” Initial jobless claims unexpectedly rose by 2,000 to 484,000 in the week ended Aug. 7, the highest level since mid February, the Labor Department said today in Washington. Companies may be losing confidence in the recovery and are hesitant to hire, raising the risk of further erosion in consumer spending, the biggest part of the economy. Federal Reserve policy makers this week said growth “is likely to be more modest” than they previously projected, prompting central bankers to take additional steps to spur a rebound. ‘All Options’ “One can only assume that the Fed is looking at all its options in order to try and provide further stimulus to the economy if it is necessary to do so,” Gary Jenkins, head of credit strategy at Evolution Securities Ltd. in London, wrote in a report. Cisco, the world’s largest maker of networking equipment, tumbled as much as 12 percent after forecasting sales late yesterday that missed analysts’ estimates and saying the recovery may be slowing. Spending by global companies on information technology equipment will slow to 4 percent next year as the economy weakens, according to Goldman Sachs Group Inc. --With assistance from Courtney Schlisserman and Tim Homan in Washington, Mark Shenk in New York, Joseph Galante in San Francisco and Adam Haigh in London. Editors: Stephanie Borise, Chris Nagi. To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

Source