* 10-yr Treasury yields hit 7-yr high as oil tops $80
* Cisco weighs on main indexes as forecast disappoints
* Walmart and J.C. Penney drop after results
* Sino-U.S. trade talks resume on Thursday
* Futures down: Dow 0.25 pct, S&P 0.07 pct, Nasdaq 0.11 pct (Updates to open)
By Medha Singh
May 17 (Reuters) - Wall Street's main indexes dropped on Thursday as U.S. bond yields climbed to a seven-year high and Cisco's forecast disappointed, while looming Sino-U.S. trade talks added to the jitters.
Shares of Cisco fell 3.6 percent and were the biggest drag on all the three major indexes, after the company's forecast indicated its transition to a software-focused business was a work in progress.
Also weighing was Walmart's 1.8 percent fall. The stock was up in premarket trading after the retailer posted a rebound in its U.S. e-commerce business and beat profit estimates.
Ten-year U.S. Treasury yields hit a high of 3.1 percent as more expensive oil pointed to faster inflation and followed some upbeat U.S. retail sales numbers.
"There's a lot of chatter that the 10-year is somehow going to explode to the upside, that's why its getting everybody's attention," Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
"There is a lot of worry out there that might be reflected in the market ... and trade is the icing on the cake."
The United States and China will resume negotiations over the next two days to resolve their differences over trade, and officials from both sides have recently signaled that they are looking for a deal.
Japan is considering tariffs on U.S. exports worth $409 million in retaliation against U.S.-imposed steel and aluminum import tariffs, according to media reports.
At 9:52 a.m. EDT the Dow Jones Industrial Average was down 61.23 points, or 0.25 percent, at 24,707.70, the S&P 500 was down 2.02 points, or 0.07 percent, at 2,720.44 and the Nasdaq Composite was down 8.43 points, or 0.11 percent, at 7,389.86.
Six of the 11 main index groups were in negative territory.
Leading the gainers was the energy sector, which rose 0.9 percent after Brent crude prices hit $80 per barrel for the first time since November 2014.
Wells Fargo dropped 1.3 percent, weighing on financials, after the Wall Street Journal reported that some bank employees altered information on business customers' documents.
J.C. Penney Co tumbled 6.7 percent after its same-store sales missed estimates and the company warned its could post a loss this year.
Coca-Cola rose 1.4 percent after Barclays upgraded the stock to "overweight."
Advancing issues outnumbered decliners by a 1.54-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.51-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and two new lows, while the Nasdaq recorded 48 new highs and 11 new lows. (Reporting by Medha Singh in Bengaluru; Editing by Anil D'Silva)