Wall Street braced for a weak start to the third quarter after weekly jobless claims posted an unexpected rise and stoked fears of a prolonged period of trouble for the unemployment picture.
Futures added to earlier losses after the release of the jobs numbers, which showed weekly claims rising 13,000 to 472,000 in the week ended June 26. Economists had been expecting a slight tick lower.
The pressure on futures comes after both the S&P 500 and the Nasdaq posted their biggest quarterly declines since the fourth quarter in 2008 during the April through June period.
The Dow experienced its biggest quarterly drop since the first quarter of 2009.
One concern for investors comes from China, where the pace of manufacturing growth slowed in June. Another comes from Spain, which is under the threat of a downgrade from S&P.
Famous investor Jim Rogers told CNBC a bubble was forming in bond markets and inflation is already here.
Spain completed a 3.5 billion euros ($4.3 billion) auction Thursday and demand was weaker than at prior auctions. France also sold nearly 7.5 billion euros in government bonds.
In other economic news, at 10 am ET the Institute for Supply Management issues its monthly manufacturing index, with consensus forecasts calling for a June reading of 59.0, compared to May's 59.7.
At the same time, the National Association of Realtors is out with pending home sales figures for May, a measure of contracts signed but not yet closed. It's expected to drop 13 percent following the expiration of the home buyer's tax credit, after April's 6 percent rise.
At the same hour May construction spending figures will be released; they are forecast to fall 0.7 percent after an April rise of 2.7 percent.
U.S. automakers will report their June sales figures, starting with General Motors at approximately 10:44 am. Industry analysts estimate that June sales came in at an 11.3 million vehicle annual pace, down from May's 11.6 million rate.
At 10:30 am, the EIA issues its weekly report on natural gas inventories.
In political news, the House has passed the financial regulation reform bill, but the Senate will not be dealing with the legislation until after the July 4th holiday recess.
And a bill in the Senate to extend jobless benefits has been successfully filibustered by GOP lawmakers, but its passage seems certain next month once a replacement is named for Democratic Senator Robert Byrd, who passed away earlier this week.
In corporate news, Toyota is considering a possible recall of up to 270,000 cars to eliminate possible engine failure.
- Written by Peter Schacknow, Senior Producer, CNBC Breaking News Desk.