Stocks Still Stuck in the Red

"We note that each summer, auto shutdowns give the government trouble and the seasonal are very unreliable," said Dan Greenhaus, chief global strategist at BTIG. "We absolutely do not believe this is a 'real' number."

"The improvement in claims was due in large part to seasonal factors, as there were fewer seasonal factory shutdowns than normal during the first week of July," said Millan Mulraine, senior U.S. strategist, TD Securities. "This should be corrected in the coming weeks, and the level of claims should revert back to level more consistent with the weak tone in labor market activity, possibly rising back to above the 370K level."

The four-week moving average was 376,500, a decrease of 9,750 from the previous week's average of 386,250.

Continuing claims for the week ended June 30 was 3.304 million, a decrease of 14,000 from the prior week's level of 3.318 million.

Meanwhile, the Bureau of Labor Statistics reported that U.S. import prices fell 2.7% in June, following a 1.2% decrease in May. Lower prices for both fuel and nonfuel imports contributed to the overall decline. U.S. export prices fell 1.7% in June after a 0.4% drop the previous month.

Also, the U.S. Treasury Department said the U.S. government had a budget deficit of $60 billion in June. That puts the federal deficit at $902 billion for fiscal 2012.

Worries about the global economy were front and center overnight. Hong Kong's Hang Seng Stock index closed down 2.03% and the Nikkei settled behind by 1.48% amid fears that forthcoming economic data from China will disappoint. In addition, the Bank of Japan refrained from following the lead of other global central banks in cutting interest rates, pursuing only small adjustments to monetary easing.

That move came a day after the disappointing minutes from the latest U.S. Federal Reserve policy meeting, which showed that "few" members of the central bank's open market committee were in favor of additional stimulus at the June 19-20 meeting and suggested that macro conditions would have to deteriorate much further in order to justify another round of quantitative easing.

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