US STOCKS-Dow, S&P 500 slip on fears over surging virus cases

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* Weekly jobless claims rise less than expected
* Walgreens drops after swinging to quarterly loss
* Cisco rises after Morgan Stanley upgrade
* Indexes: Dow down 1.16%, S&P off 0.65%, Nasdaq up 0.21%

(Updates to early afternoon)
By Medha Singh and C Nivedita
July 9 (Reuters) - The S&P 500 and Dow dropped on Thursday
as fears of another round of business shutdowns to contain a
surge in coronavirus cases overshadowed data pointing to a
declining trend in weekly jobless claims.
However, Amazon.com AMZN.O , Microsoft Corp MSFT.O and
Apple Inc AAPL.O helped the tech-heavy Nasdaq reverse earlier
losses to hit another record high.
The United States saw more than 60,000 new COVID-19
infections on Wednesday, setting a single-day global record
while Florida and Texas reported a record one-day increase in
deaths. "We need consumers and businesses to be engaged in a
recovery - shutdown or no shutdown - and the news of increased
spread of the virus weighs on consumer psychology and
sentiment," said Willie Delwiche, investment strategist at Baird
in Milwaukee.
"The market has rallied in anticipation of progress being
made on the economy and today is a step back from that."
A batch of upbeat economic data including the record pace of
job additions in June has underscored that the stimulus-fueled
domestic economy was on the path to recovery.
The benchmark S&P 500 has risen more than 40% from its March
lows and is now about 7.8% below its February record high. The
Nasdaq notched a record close in the prior session and the Dow
is about 13.6% from its own February all-time peak.
U.S. stocks had opened higher after data showed the number
of Americans filing for jobless benefits dropped to a near
four-month low last week, but a record 32.9 million people were
collecting unemployment checks in the third week of June.
At 01:10 p.m. ET the Dow Jones Industrial Average .DJI
fell 1.16% to 25,764.46. The .SPX lost 0.65% to 3,149.26 and
the Nasdaq .IXIC rose 0.21% to 10,515 points.
Cyclical energy .SPNY and financials .SPSY lost the most
ground among the 11 major S&P sectors.
In a bullish signal for near-term momentum, the benchmark
S&P 500's chart formed a "golden cross" pattern, in which its
50-day moving average vaulted above the 200-day moving average.
Walgreens Boots Alliance Inc WBA.O tumbled 9% after it
reported a quarterly loss compared with a profit a year earlier,
hurt by non-cash impairment charges of $2 billion as COVID-19
disrupted business at its Boots UK division. Cisco Systems Inc CSCO.O rose 2% as Morgan Stanley
upgraded its rating on the network gear maker's stock to
"overweight".
Declining issues outnumbered advancers for a 3.69-to-1 ratio
on the NYSE and for a 2.78-to-1 ratio on the Nasdaq.
The S&P index recorded 31 new 52-week highs and one new low,
while the Nasdaq recorded 107 new highs and 28 new lows.