Futures tumbled Thursday after jobless claims jumped to a 16-year high.
This followed Wednesday's crushing selloff that saw the Dow close below 8,000 for the first time in more than five years.
Jobless claims rose by 27,000to a seasonally adjusted 542,000 last week, well above the 508,000 economists had expected and the highest since July 1992. Continuing claims rose by 109,000 to 4.01 million.
Attention will turn from the beleaguered Big Three auto makers to the former heads of Fannie Mae and Freddie Mac as they are due to face a grilling from lawmakers later today.
Citigroup will remain in focus following a 23 percent decline in the bank's share price on Wednesday. Many institutional investors will be smarting after the stock's rapid slump.
Citigroup shares retreated after an earlier bounce following news that Saudi Prince Alwaleed Bin Talal Alsaud had upped his stake in the company to 5 percent and gave his full support to the bank's top management.
GMAC, the money-losing partnership between General Motors and Cerebrus Capital Management, announced that it has applied to become a bank-holding company.
The market also took some optimism from PepsiCo , which reiterated its full-year outlook and was planning to reveal later in the day innovation ideas for its North American beverage unit.
The Federal Reserve pared its outlook for economic growth through 2009 leading market watchers to expect further cuts to the base interest rate. It also added to the growing fear of a deflationary spiral taking hold of the economy.
Adding the economic picture is November's Philadelphia Fed survey and October's leading indicators, both out at 10 am.
Treasury Secretary Henry Paulson will speak about the economic outlook at 2 pm in the Reagan Library in Simi Valley, California.
And St. Louis Fed President James Bullard is due to talk at an economic forum in Evansville, Indiana at 7 pm.