U.S. stocks slid on Thursday as falling commodity prices prompted an unwinding of bets on risky assets and raised questions about the strength of the economic recovery, while a sour outlook from Cisco hurt technology stocks.

Commodities pared some losses after U.S. data showed a decline in jobless benefit claims last week and a revision to retail sales data suggested consumer spending in the first quarter might have been stronger than initially thought. Wholesale prices, however, rose above expectations .

U.S. crude futures lost 1.7 percent and the energy sector <.GSPE>, down 1.5 percent, was again the worst performing group on the S&P 500.

Both the consumer staples <.GSPS> and the consumer discretionary <.GSPD> sectors were slightly higher.

A drop in oil prices is a bit good for the consumer, but that's not the trade of the moment, as people are really scared about the commodity crisis being a sign of slowing global growth, said Paul Zemsky, head of asset allocation at ING in NYC.

He said upcoming U.S. consumer price data on Friday would be key, as benign inflation could help stabilize equities. But with a higher-than-expected number, the stagflation story will continue to permeate the market.

Cisco Systems Inc warned on Wednesday it would fare worse this quarter than Wall Street had feared and laid out plans for global job cuts as it struggles to revive growth. Its shares fell 5.2 percent at $16.86.

The Dow Jones industrial average <.DJI> was down 49.49 points, or 0.39 percent, at 12,580.54. The Standard & Poor's 500 Index <.SPX> was down 5.05 points, or 0.38 percent, at 1,337.03. The Nasdaq Composite Index <.IXIC> was down 5.57 points, or 0.20 percent, at 2,839.49.

The wave of profit taking in commodities pulled copper prices to their lowest level since December 1, while spot silver lost more than 5 percent after tumbling about 9 percent Wednesday. The iShares Silver Trust dropped 4.5 percent to $32.90.

The Reuters/Jefferies CRB index <.CRB>, a broad measure of commodity performance, has lost 9.7 percent so far in May.

(Reporting by Rodrigo Campos; Editing by Padraic Cassidy)

Inflation