U.S. stocks fell further on Thursday as data showed the manufacturing sector grew in September at a slower pace than anticipated and weighed on investor sentiment.

The Nasdaq fell more than 2 percent, with Cisco Systems Inc slipping 1.5 percent after it agreed to buy Norwegian videoconferencing company Tandberg for $3 billion in cash.

Microsoft Corp shares fell 3 percent after Goldman Sachs removed the world's No. 1 software maker from its Americas Conviction Buy list.

The Dow Jones industrial average <.DJI> lost 63.11 points, or 0.65 percent, to 9,649.17. The Standard & Poor's 500 Index <.SPX> fell 8.26 points, or 0.78 percent, to 1,048.82. The Nasdaq Composite Index <.IXIC> dropped 19.81 points, or 0.93 percent, to 2,102.61.

(Editing by Padraic Cassidy)