* Cisco's stock flies after earnings, outlook
* U.S. jobless claims hit six-month high
* Wal-Mart falls after earnings miss
* Dow up 0.1 pct; S&P 500 up 0.01 pct; Nasdaq up 0.3 pct
By Angela Moon
NEW YORK, May 16 (Reuters) - U.S. stocks advanced modestly on Thursday as Cisco led gains in blue chips and technology stocks following strong earnings, offsetting concerns about softer-than-expected data on the manufacturing sector and labor market.
Cisco Systems Inc shares surged 12.5 percent to $23.86, lifting the Dow and the Nasdaq after the network equipment maker posted a higher-than-expected quarterly profit and said current-quarter revenue could increase.
Apple Inc, up 1.9 percent at $437.19, and Hewlett-Packard, up 1.6 percent at $21.31, also ranked among the day's big tech gainers, along with International Business Machines, up 1.3 percent at $205.87.
Wall Street started off Thursday's session slightly weaker after data showed the biggest jump in weekly initial jobless claims since November.
Other data showed housing starts slid in April, falling sharply below analysts' expectations, while business activity in the U.S. mid-Atlantic region contracted in May, according to data from the Federal Reserve Bank of Philadelphia.
But market participants were more optimistic about the sustainability of the rally that has driven the S&P 500 up more than 16 percent for the year.
"The very latest evidence on a rise in initial claims is unlikely to be seen as a sign of changing seas for the labor market in the long run, and at the end of the day, is a single data point," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York.
The Dow Jones industrial average edged up 12.16 points, or 0.08 percent, to 15,287.85. The Standard & Poor's 500 Index inched up just 0.10 of a point, or 0.01 percent, to 1,658.88. The Nasdaq Composite Index rose 9.35 points, or 0.27 percent, to 3,480.96.
Shares of Wal-Mart Stores Inc fell 2.2 percent to $78.14 and weighed on the Dow after the world's largest retailer posted a quarterly profit that missed Wall Street's expectations, with sales down 1.4 percent at U.S. stores open at least a year.
Tesla Motors Inc gained 5.8 percent to $89.75 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 the company reported earnings last week.
Class B shares of Berkshire Hathaway fell 0.7 percent to $111.98 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.
In other data, the U.S. 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.