US STOCKS-Futures fall on fears of prolonged economic downturn
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* Cisco rises as profit, revenue top estimates
* Wall Street's fear gauge near 10-day high
* Futures fall: Dow 1.45%, S&P 1.16%, Nasdaq 1.02% (Adds comment, details; Updates prices)
By Medha Singh
May 14 (Reuters) - Wall Street's main indexes were set to extend declines on Thursday, following two prior sessions of losses, as investors worried the current economic downturn might be here for longer than initially presumed.
Futures fell further after data showed 2.98 million Americans filed for state unemployment benefits last week, higher than economists' estimates and cementing expectations for a third straight month of massive job losses in May.
However, this marked the sixth straight weekly drop in jobless claims, since topping 6 million in the final week of March.
The three main stock indexes are now headed for their worst week since mid-March, as hopes of a quick economic recovery were dashed this week following sobering comments from Federal Reserve Chairman Jerome Powell and leading U.S. infectious disease expert Anthony Fauci.
Wall Street's fear gauge, the CBOE volatility index rose for the third straight day, hovering near a 10-day high.
"Powell's comments sent a reminder to equity bulls that the economy cannot be turned on by a switch and when it begins to recover, it may be more gradual than hoped," said Hussein Sayed, chief market strategist at FXTM.
The focus now turns to retail sales data on Friday that will reflect the impact of stay-at-home orders on the U.S. consumer in April.
A new report indicated credit card spending among some of JP Morgan Chase & Co's U.S. customers fell 40% during March and early April compared to last year.
"Our expectation is that the last two, maybe three weeks is probably the worst that we'll see from the economic data, because states are opening, we should see a gradual recovery," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
At 8:46 a.m. ET, Dow e-minis were down 337 points, or 1.45%. S&P 500 e-minis were down 32.75 points, or 1.16% and Nasdaq 100 e-minis were down 92 points, or 1.02%.
Beaten-down travel stocks including United Airlines Holdings Inc, American Airlines Group Inc, hotel operator Marriott International Inc fell between 2.3% and 5.2% premarket.
Norwegian Cruise Line Holdings Ltd dropped 4.5% as it swung to a quarterly loss due to a virtual standstill in global travel earlier this year.
Among other stocks, Cisco Systems Inc rose 1.1% after beating quarterly revenue and profit estimates, as lockdowns globally boosted demand for its remote-work tools and networking equipment.
The earnings season is in its final stretch with 448 S&P 500 companies having reported so far. On average, first-quarter earnings are expected to fall 12.2%, according to Refinitiv data. (Reporting by Medha Singh and Ambar Warrick in Bengaluru; Editing by Shounak Dasgupta)
