Investors moved into the safety of bonds for the third straight day, pushing interest rates lower. The dollar also strengthened as investors moved out of the euro again.

The Labor Department said unemployment claims fell to a seasonally adjusted 457,000 last week. That's slightly better than the 460,000 forecast by economists polled by Thomson Reuters.

However, initial jobless claims are still above levels that would signal employers are ramping up hiring. Claims have remained high in recent months, calling into question whether a strong, sustained recovery can occur without significant job growth.

A second report showed orders for durable goods fell last month for the first time in six months. Orders for big-ticket goods fell 1.1 percent in May, slightly better than the 1.3 percent drop predicted.

The decline was due primarily to volatile transportation orders. Excluding transportation, orders actually rose 0.9 percent after falling in April. Manufacturing has been one of the few areas of the economy that has shown consistent growth, but it hasn't been enough to propel stocks higher.

A weak jobs recovery and continued problems in the housing market have overshadowed upbeat signs in manufacturing.

Ahead of the opening bell, Dow Jones industrial average futures fell 28, or 0.3 percent, to 10,211. Standard and amp; Poor's 500 index futures fell 3.70, or 0.3 percent, to 1,083.70, while Nasdaq 100 index futures fell 13.75, or 0.7 percent, to 1,860.00.

The unemployment and durable goods orders reports come a day after The Federal Reserve struck a more cautious tone about the pace of recovery in the US and the Commerce Department said sales of new homes fell to the lowest level on record. Evidence has been piling up in recent weeks that the economy is growing, but not as fast as investors might have hoped for earlier this year. That has helped push stocks off their highs for the year, which were set in late April.

The Dow posted a small gain of 5 points Wednesday, but broader indexes fell.

The Fed said a recovery could be slow, hurt in part by weakness overseas. There are concerns that European countries facing mounting debt will have to slash spending so much that they stagnate the continent's economy and that slowdown spreads around the globe. Those concerns have hurt the euro in recent months. The currency used by 16 countries was down to $1.229 Thursday.

Treasury prices rose Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.09 percent from 3.12 percent late Wednesday.

Overseas, Britain's FTSE 100 fell 0.8 percent, Germany's DAX index dropped 0.7 percent, and France's CAC-40 fell 0.8 percent. Japan's Nikkei stock average rose 0.1 percent.