Futures briefly cut some of their earlier losses Thursday after investors cheered the weekly jobless claims numbers, but quickly plunged again, pressured by fears over the euro zone debt crisis and as the dollar surged against a basket of currencies.
Future were also pressured as the dollar surged against a basket of currencies. The greenback's surge came amid a weakening economic outlook and moves by Japan to intervene in the forex market to bolster the yen.
Weekly jobless claims were little changed last week, edging down 1,000 to a seasonally adjusted 400,000, according to the Labor Department, signaling a marginal improvement in the labor market.
Economists polled by Reuters had forecast claims rising to 405,000. The prior week's figure was revised up to 401,000 from the previously reported 398,000.
The claims data falls outside the survey period for the government's closely monitored employment report for July, which is scheduled for release on Friday.
Nonfarm payrolls likely increased 85,000 last month, according to a Reuters survey, after rising only 18,000 in June. The unemployment rate is expected to hold steady at 9.2 percent.
Investors took stock of JPMorgan Chase’s cut to its forecast for US third-quarter growth to 1.5 percent from 2.5 percent and said the first half of next year’s GDP growth would be less than initially forecast down 1.5 percent to 2 percent.
Investors were also watching earnings from major firms including General Motors , KraftFoods ,Linkedin and Southwest Airlines as well as US consumer sales figures.
GM, Kraft and Southwest all beat estimates, with Kraft making a splash by splitting its company in two.
Meanwhile, the Bank of Japan sold 1 trillion yen ($12.6 billion) and eased monetary policy on Thursday, joining Switzerland in efforts to tame currencies buoyed by safe-haven demand from investors fretting about the health of the global economy.
Meanwhile U.S. warehouse club operator Costco posted a higher-than-expected 10 percent rise in July sales at stores open at least a year, helped by higher gas prices and strengthening foreign currencies after the close on Wednesday.
Other major U.S. retailers will be releasing July sales numbers throughout the morning.
In Europe, the Bank of England and European Central Bank both left rates unchanged, although investors were watching for any indication from the ECB that it will be willing to buy Spanish and Italian debt after the rise in Italian and Spanish bond yields in recent days.
A Spanish auction earlier Thursday went better than feared, with the 3.3 billion euros worth of bonds sold coming in at the high end of the expected range.
European shares turned flat on Thursday as bank stocks reversed earlier session gains and miners fell, with Rio Tinto among the worst performers after results came in below expectations.
Lloyd’s Banking Groupposted a loss of 3.25 billion pounds($5.3 billion) for the first half of the year in part as a result of setting aside 3.2 billion pounds for the mis-selling of payment protection insurance.
Coming Up This Week:
THURSDAY: Money supply; Earnings from AIG, Kraft, Sunoco
FRIDAY: Employment situation, consumer credit; Earnings from P&G
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