* Walmart gains after Q2 comp sales beat
* Cisco tumbles after forecast disappoints
* U.S. retail sales surge in July in boost to economy
* Dow up 0.08%, S&P rises 0.21%, Nasdaq flat (Changes comment, updates prices)
By Amy Caren Daniel
Aug 15 (Reuters) - U.S. stocks swung between gains and losses on Thursday as strong July retail sales and upbeat Walmart earnings eased fears of a recession, but mixed reports on trade and Cisco's dismal forecast kept investors on edge.
The Commerce Department said retail sales rose 0.7% in July, well above expectations of a 0.3% rise, as consumers bought a range of goods even as they cut back on motor vehicle purchases.
"Data still indicates that the consumer is in a relatively good shape, it points to the fact that even with an inverted yield curve that we saw yesterday, a recession is not coming so fast," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
"The trade news is not linear. It's very hard to guess what the next step is going to be and it's impacting companies like Cisco, so the longer the trade issue lingers, the harder it is going be for companies to show top- and bottom-line growth."
Wall Street's main indexes slumped 3% on Wednesday, with the blue-chip Dow index recording its worst day this year, as recession fears gripped the market after the U.S. Treasury yield curve inverted for the first time in 12 years.
Walmart Inc shares rose 5% after the retailer reported second-quarter U.S. comparable sales that beat estimates and boosted its earnings forecast for the year.
The company's strong report lifted the consumer staples sector up 1.2%, the most among the S&P sectors.
In contrast, Cisco Systems Inc dropped 7.6% and was the biggest drag on all three major indexes, after the Dow component blamed the bruising U.S.-China trade war for poor quarterly forecasts.
Trade worries have plagued financial markets for at least a year, fuelling fears of a recession and prompting traders to raise their bets on three rate cuts this year, including one in September.
The benchmark S&P 500 is now about 6% away from its all-time high hit in July.
China's finance ministry said earlier in the day that it would retaliate to the latest U.S. tariffs. However, a spokeswoman for the ministry later said, "We hope the U.S. will meet China halfway, and implement the consensus of the two heads of the two countries in Osaka."
At 11:00 a.m. ET, the Dow Jones Industrial Average was up 20.21 points, or 0.08%, at 25,499.63 and the S&P 500 was up 5.98 points, or 0.21%, at 2,846.58. The Nasdaq Composite was down 1.39 points, or 0.02%, at 7,772.55.
General Electric plunged 9.9%, and was on pace to post its biggest one-day drop in a decade, after a whistleblower in the Bernard Madoff Ponzi scheme case alleged that company financial filings masked the depths of its problems.
Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE and by a 1.09-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and 43 new lows, while the Nasdaq recorded 13 new highs and 163 new lows. (Reporting by Amy Caren Daniel and Arjun Panchadar in Bengaluru; Editing by Anil D'Silva)