NEW YORK ( TheStreet) -- Stock futures were lower Thursday as continued concerns about eurozone contagion overshadowed an unexpected drop in initial jobless claims. Futures for the Dow Jones Industrial Average were down by 1 point, or 41 points above fair value, at 10,724. Futures for the S&P 500 were lower by 1.5 points, or 4.6 points above fair value, at 1122, and Nasdaq futures were up by 2.7 points, or 16.9 points above fair value. Stocks sank Wednesday, obliterating the previous session's gains, as concerns about the European debt crisis returned to the forefront, a day after the Federal Reserve downgraded its view of the economic outlook. Major global markets were wavering amid a volatile trading session following a Reuters report that said an Asian bank severed credit lines to major French lenders and five other banks were reviewing their exposure to French banks. French bank stocks plunged on Wednesday amid rumors that France could lose its AAA credit rating. After rebounding earlier, French banks were again trading in the red. Shares of Societe Generale were down 7.4%, BNP Paribas was losing 6% and Credit Agricole was shedding 5%. The FTSE in London was adding 0.5%, the DAX in Frankfurt was losing 0.6% and the CAC-40 in Paris was dropping 1.9%. According to a New York Times report, the European Securities and Markets Authority is considering a temporary ban on short-selling European stocks. Short-selling involves betting that a stock will decline. In Asia, Hong Kong's Hang Seng fell 1%, and Japan's Nikkei shed 0.6%. The Labor Department said initial jobless claims unexpectedly fell by 7,000 to 395,000 in the week ended Aug. 6. The market had been expecting an uptick to 409,000 claims from last week's originally reported level of 400,000, which was upwardly revised to 402,000. The drop in claims to below the 400,000 level comes two days after the Federal Reserve noted "deterioration in labor market conditions" in its rate decision statement.
The Department of Commerce said the trade deficit unexpectedly expanded to $53.1 billion in June, from a deficit of $50.08 in May. Economists forecasted a contraction to $48 billion in June, from May's originally reported deficit of $50.2 billion. The benchmark 10-year Treasury was down 9 9/32, lifting the yield to 2.172%. The dollar weakened slightly against a basket of currencies, with the dollar index down by 0.01%.
. Gold prices stepped back, after trading above $1,800 an ounce for the first time on Wednesday. Gold for December delivery was up by $1 at $1,785.30 an ounce. Oil prices were also slipping. The September crude oil contract was losing $1.55 to trade at $81.34 a barrel. Shares of Cisco Systems ( CSCO) were surging 12% to $15.38 in early trading after topping analysts' profit estimates by 2 cents with earnings of 40 cents a share and delivering an encouraging outlook for the current quarter late Wednesday. Shares of AOL ( AOL) were gaining 2.6% to $10.49 ahead of Thursday's opening bell on news that the company plans to buy back $250 million of stock over the next 12 months. Anheuser-Busch InBev ( BUD) reported second-quarter earnings of $1.45 billion that fell short of quarterly profit estimates for $1.5 billion. The brewing company also said U.S. and Canadian volume fell 1.5% in the quarter. The stock was losing 2.1% to $48.69 during premarket trading. -- Written by Melinda Peer in New York.