* Cisco jumps after earnings, outlook
* Wal-Mart slips after earnings miss
* Jobless claims climb, housing starts drop
* Indexes: Dow off 0.25 pct, S&P 0.31 pct, Nasdaq off 0.05 pct
By Chuck Mikolajczak
NEW YORK, May 16 (Reuters) - U.S. stocks were little changed on Thursday after softer-than-expected data on the manufacturing sector and labor market, but gains in Cisco helped temper declines.
Weekly initial jobless claims jumped by 32,000 to a seasonally adjusted 360,000, the biggest jump since November and above expectations. Housing starts were below analysts' expectations, although applications to build new homes rose.
Further weakness showed in data from the Philadelphia Federal Reserve, whose business activity index dropped to minus 5.2, from 1.3 in April, worse than economists' expectations for a slight gain.
But the Consumer Price Index posted the biggest decline since December 2008, indicating inflation pressure remains tame and giving the U.S. Federal Reserve latitude to maintain its current monetary policy.
Data showing a modestly growing economy has increased investor confidence the Fed will keep stimulus measures in place, helping push yearly gains for both the Dow and S&P 500 indexes to more than 16 percent.
"Everyone is waiting for some sort of pullback and we haven't had one in a very long time, when the momentum is stronger we don't see a larger pullback that people are expecting," said Amy Magnotta, Portfolio Manager and Senior Investment Analyst at Brinker Capital in Berwyn, Pennsylvania.
"Even when we have gotten worse data, the market has turned around, so today could go either way."
But gains in Cisco Systems Inc, which surged 13.2 percent to $24, helped limit declines on the Dow and S&P and lift the Nasdaq after the network equipment maker posted a higher-than-expected quarterly profit and said current-quarter revenue could increase.
The Dow Jones industrial average dropped 38.02 points, or 0.25 percent, to 15,237.67. The Standard & Poor's 500 Index lost 5.08 points, or 0.31 percent, to 1,653.70. The Nasdaq Composite Index shed 1.81 points, or 0.05 percent, to 3,469.81.
Wal-Mart Stores Inc, the world's largest retailer fell 1.4 percent to $78.73 after posting a quarterly profit that missed Wall Street expectations, with sales down 1.4 percent at U.S. stores open at least a year.
Tesla Motors Inc advanced 5.3 percent to $89.35 after the electric carmaker said it aims to raise $830 million through a stock and debt offering that will be used to repay its U.S. Department of Energy loans with interest. The stock has surged more than 50 percent since posting earnings last week.
Berkshire Hathaway B-class shares slipped 0.5 percent to $112.22 after Standard & Poor's downgraded the company's counterparty rating to "AA" from "AA+" with a negative outlook, citing the company's reliance on its insurance operations for dividend income.