Courtesy of John Nyaradi.

Another bad day for U.S. stocks as Cisco and Walmart tank on earnings news and legendary investor George Soros bets against S&P.

Major U.S. stock indexes took a sharp fall early Thursday as the Dow Jones Industrial Average (NYSEARCA:DIA) was down more than 200 points in mid-day trade, the S&P 500 (NYSEARCA:SPY) shed 1.3% and the Nasdaq Composite (NYSEARCA:QQQ) tumbled 1.5%.

Today’s ongoing angst was caused by weak earnings reports and cloudy outlooks from Walmart (NYSE:WMT) and Cisco (NYSE:CSCO) which are widely regarded as bell whether names in the consumer (NYSEARCA:XLY) and technology sector (NYSEARCA:QQQ)

Cisco (NYSERCA:CSCO) started things off after hours on Wednesday with a gloomy assessment of macro economic conditions and the unusual weakness of the recovery and then announced that it was cutting 4,000 jobs, roughly 5% of the company’s work force.  The company’s stock tanked nearly 10% in after hours trade on Wednesday and was down another 6% on Thursday, falling below its 50 day moving average.

Walmart (NYSE:WMT) joined in the not so fun decliners column with a drop of 2.5% as the global retailing giant says that the economy is difficult around the world and hurting the lower end of the consumer economics spectrum.  The company’s second quarter results came up short of expectations and other retail sector (NYSEARCA:XRT) giants like Macy’s and Kohl’s also checked in with weak results.

Weak employment prospects, part time jobs, sequester and increased payroll taxes have all contributed damage to low end shoppers who have reigned in their spending in recent weeks.

Walmart is seen as a barometer of the real economy as it is the world’s largest retailer and peddles more than $30 billion of consumer goods every month.  If Walmart shows weakness, many economists and analysts says that the U.S. economy will or is also showing weakness.  And this weakness seems to be spreading across the retailing sector as Macy’s and Kohl’s underperformed and Target is due to report next week.

And don’t forget J.C. Penney’s (NYSE:JCP) which is in the throes of a cash crunch and executive upheaval and down sharply from recent highs.

Added all together, the retail sector (NYSEARcA:XRT) is looking exceedingly weak and could reflect unanticipated weakness in the U.S. and global economy in days ahead.

To top off today’s gloomy atmosphere, legendary investor and hedge fund titan, George Soros, has reportedly bought a boat load of S&P 500 (NYSEARCA:SPY) put options in anticipation of the S&P 500 going lower.  Mr. Soros is famous for making a billion here and a billion there, oftentimes in currencies like the Japanese Yen and British Pound, but today seems to have turned his attention to the S&P 500 (NYSE:SPY)

Read “Another Hindenburg Omen!”

Read “Will J.C. Penney’s Survive?”

Bottom line: U.S. stocks continue falling from recent highs as earnings concerns dampen the outlook and retailing (NYSEARCA:XRT) looks particularly weak in front of the all important back to school shopping season.  Poor performance from major bell whether stocks like Wal-Mart (NYSE:WMT) and Cisco (Nasdaq:CSCO) cannot be ignored as fundamental weakness starts showing up in the  U.S. economy.

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