GLOBAL MARKETS - U.S. stocks flat as recession fears weigh

By Herbert Lash

NEW YORK (Reuters) - U.S. stocks were little changed and Treasury debt prices mostly rose on Thursday after a surprisingly big jump in weekly jobless claims raised fears of a recession and the impact a credit crunch will have on global growth.

European stocks fell as worries of further asset write-downs weighed on the banking sector, while data showed a slowdown in the euro zone economies.

The dollar gained against the euro as investors reassessed expectations of deep U.S. interest rate cuts, and oil prices rose slightly as crude markets weighed the likelihood the Federal Reserve will cut rates further, which could boost oil futures.

Stocks opened lower following U.S. data showing the number of workers applying for unemployment benefits soared to the highest level since September 2005, reinforcing fears that the U.S. economy has stalled.

The report stirred concern that the Labor Department's monthly employment report, due on Friday, may show further deterioration in the U.S. job market.

"The trend is for rising unemployment. There's no doubt about it," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "I've been bearish for a long time and I don't think we have found a bottom."

On Wall Street, stocks were near flat in early afternoon trading. The Dow Jones industrial average edged down 7.16 points, or 0.06 percent, at 12,598.67. The Standard & Poor's 500 Index was up 0.12 point, or 0.01 percent, at 1,367.65. The Nasdaq Composite Index was down 1.19 points, or 0.05 percent, at 2,360.21.

Technology stocks sagged after Cisco Systems Inc, was downgraded by investment bank UBS on concerns about slowing orders and navigational device maker Garmin GRMN gave revenue forecasts at the low end of market expectations.