Updated from 10:00 a.m. EDT

Stocks in New York were looking soft Thursday as traders tried to regroup after an all-day selloff in the previous session.

After opening higher, the major averages quickly went negative. The

S&P 500

was down 5 points at 1332. The


was shedding 16 points at 2413, and the

Dow Jones Industrial Average

lost 43 points to 11,986.

Prior to the start of the session, the Labor Department said jobless claims for the week ended June 14 declined by 5,000 to 381,000, but came in higher than analysts' expectation of 375,000 and remain at elevated levels.

Investors were also chewing over manufacturing data from the Philadelphia

Federal Reserve

. Released midmorning, the Philly Fed's Business Outlook Survey's index of business conditions for June fell to -17.1 from -15.6 in May. The index revealed a much weaker outlook than analysts' prediction of -10.

Treasury Secretary Henry Paulson is also expected to speak on regulatory changes in the financial markets that would expand the Fed's role in preventing a potential failure like the one faced by

Bear Stearns

earlier this year.

On the corporate front, billionaire investor Kirk Kerkorian raised his stake in


(F) - Get Report

to 6.49% and announced he would provide additional capital to facilitate the automaker's turnaround.

Elsewhere in autos,

General Motors

(GM) - Get Report

will delay redesigns for its SUVs and trucks as it moves toward more fuel-efficient products, a report said. GM is reviewing its product portfolio in the wake of declining demand for its heavier, less-fuel efficient offerings, a spokesman told

The Wall Street Journal



(BA) - Get Report

shares received a slight boost after the Government Accountability Office approved of its protest of a $35 billion Air Force contract awarded to competitors

Northrop Grumman

(NOC) - Get Report


European Aeronautic Defense and Space


Electronics retailer

Circuit City

(CC) - Get Report

announced a widened first-quarter loss of $1 a share, but that topped the consensus estimate for a $1.07 loss.

Also reporting earnings was

Pier 1 Imports

(PIR) - Get Report

. The home-furnishings retailer announced a narrowed first-quarter loss but fell short of analyst estimates even as it improved margins. Shares got hammered, down more than 18% in early trading.

In the technology space,


(HPQ) - Get Report

announced it would reorganize its highly profitable printer unit in the face of declining growth for the business.

Insurance behemoth

American International Group

(AIG) - Get Report

shares climbed slightly on a Citigroup upgrade to buy from hold.

Apria Healthcare

( AHG) shares soared on a $1.6 billion buyout by private equity firm Blackstone Group. The price represents a 33% premium over Apria stock's Wednesday closing price.

Other health services stocks were hurting on an earnings warning from

Coventry Health Care

( CVH).






fell along with Coventry.

Turning to commodities, crude oil was trading down $2.26 to $134.42 as traders processed news that rebel fighters attacked a Nigerian oil field.

Royal Dutch Shell


said it would shut down production of the field, which yields 200,000 barrels a day, following the attack. Oil prices had climbed more than $2 a barrel on Wednesday. Gold was up $13.40 at $906.90.

Meanwhile, the Agriculture Department projected that cereal, sugar and poultry prices are set to increase at a higher-than-expected rate. The USDA cited increased global demand for U.S. food products as well as crop-damaging floods in the Midwest as causes for the continued price inflation.

Markets overseas were mixed. Tokyo's Nikkei and the Hong Kong Hang Seng dropped more than 2%, while in Europe, the FTSE was slipping 0.5%, and the DAX was mostly unchanged.

Bond prices were declining. The 10-year note was down 6/32 to yield 4.16%, and the 30-year bond was lower by 9/32 to yield 4.73%.

The dollar was gaining slightly against the euro, but declining sharply against the pound and holding steady against the yen.