U.S. stock index futures pointed to a sharply lower opening as European shares slumped and the euro hit session lows.
Investors remained uncertain about the implications of financial reform efforts around the world, and volatility remained high in global markets.
An unexpected jump in new claims for unemployment insurance only added to the market's woes. The Labor Department said 471,000 new claims were filed last week, the first increase since early April and a sign that the employment problem is not easing. Futures briefly added to losses after the data release.
The euro fell hard against the dollar, which gained against a basket of currencies. European stocks extended losses.
US Stocks were poised to drop about 1.5 percent at the open as investors continued to fear that European contagion would spread and drag down world markets.
Treasurys, particularly longer-dated securities, jumped on the stock market turmoil. The 30-year bond gained more than one point in price, sending its yield to 4.16 percent, its lowest since Oct. 20, 2009. Prices and yields move in opposite directions.
Commodity prices fell also, with crude oil losing $1.60 to approach $68 a barrel.
The closely watched Chicago Board Options Exchange Volatility Index rose 15 percent on Wednesday, hitting an intraday high of 38.42, and markets fell again, wiping out 2010 gains for the S&P 500 index.
Financials were leading the negative market sentiment, with the SPDR Financial exchange-traded fund off 1.5 percent in premarket trading.
Uncertainty grew on the back of concerns about the euro zone's economic health, and whether Germany’s financial reforms will backfire on stocks.
Other European nations, including France, the Netherlands and Finland, announced they have no plans to follow Germany’s ban on naked short selling of specific instruments, to control what Chancellor Angela Merkel called "destructive" markets.
Also in Europe, more protests are scheduled to take place in Greece today against the new austerity measures.
Asian markets were lower, with Tokyo, Seoul and Sydney down more than 1.5 percent each, as political divisions in Europe, again, and fears of more market regulation pressured stocks.
Economic data scheduled for release on Thursday include weekly jobless claims at 8:30 am New York time, with analysts forecasting 440,000, down from last week's 444,000. The Philadelphia Fed Index will be announced at 10 am New York time, forecast up to 21.2 from 20.2 last month.
At the same time, the Conference Board issues its monthly index of leading economic indicators, with consensus forecasts calling for an increase of 0.2 percent on top of last month's 1.2 percent rise.
In earnings, office retailer Staples reported a 32 percent rise in profit to 26 cents a share.
Other companies to announce quarterly earnings before the bell include the Computer Sciences and GameStop.
After the closing bell, earnings are due from Dell , Gap , and Intuit.
In deals, Symantec is paying $1.28 billion for VeriSign's security business, which specializes in Web site identity and authentication.
And on the political scene, the financial regulatory reform bill failed to pass in the Senate on Wednesday amid resistance from both parties, but Democrats will attempt to seal the deal on Thursday with a fresh vote at 2:30 pm Washington time. SEC Chairman Mary Schapiro and CFTC Chairman Gary Gensler will testify about new regulations to prevent May 6th’s "flash crash” from happening again.