NEW YORK ( TheStreet) -- Stock futures were paring declines Thursday as investor sentiment got a boost from better-than-expected consumer spending and labor market reports. The bump reversed an early retreat on as the Japanese yen and Treasuries surged, and investors remained on edge about the direction of global monetary policy. The Japanese market sank into bear market territory Thursday.

"There is very real panic in the markets this morning all around the world as stock prices quite literally plunged in Asia ... as money is moving out of equities into bonds and anything associated with dollars of any sort are being sold," Dennis Gartman, an economist and trader, said in his daily Gartman letter.

Futures for the S&P 500 were falling 5 points, or 7.02 points below fair value, to 1,605. Futures for the Dow Jones Industrial Average were slumping 44 points, or 55.23 points below fair value, to 14,934. Futures for the Nasdaq were down 4.75 points, or 10.54 points below fair value, to 2,915.5.

Royal Bank of Scotland ( RBS) was edging lower at $9.84 in premarket trading. The bank said Wednesday that Stephen Hester will step down as CEO later this year. The bank is 81%-owned by the U.K. government following a bailout in 2008.

Hester was pressured to resign by the bank's board, which wants a new leader in place as RBS prepares to return to the private sector.

BlackBerry ( BBRY) was rising 2.21% to $13.86after the stock was raised to "buy" from "sell" by Societe Generale analysts, who cited better than expected BlackBerry 10 sales.

PVH Corp. ( PVH) was popping 7.48% to $119.60 after the apparel maker booked first-quarter earnings that exceeded the average analyst earnings estimate of $1.35 a share at $1.91 a share thanks to stronger sales at Tommy Hilfiger and Calvin Klein.

Belo Corp. ( BLC) was surging 27.87% to $13.72. The TV company is being acquired by media company Gannett ( GCI) for $13.75 a share in cash, or about $1.5 billion in a deal the nearly doubles Gannett's current broadcast portfolio.

Safeway ( SWY) was surging 18.78% to $27.45 after saying Wednesday it plans to sell its Canadian supermarket operations to Sobeys, the No. 2 grocery store operator in Canada, for $5.7 billion. Safeway will have about 1,400 stores in the U.S. after the deal.

The Census Bureau's retail sales report Thursday showed a nice rebound in consumer spending activity in May. Retail sales rose by a greater than expected 0.6%, the strongest reading since February, after increasing 0.1% in April. Economists, on average, were expecting a rise of 0.4% in May.

The Labor Department reported that weekly initial jobless claims slipped by 12,000 to a less than expected 334,000 in the week ended June 8. Economists, on average, were expecting jobless claims of 345,000. The four-week moving average was 345,250, a decrease of 7,250 from the previous week's unrevised average of 352,500.

Continuing claims during the week ending June 1 was less than predicted at 2.973 million, an increase of 2,000 from the preceding week's level of 2.971 million. Economists were expecting continuing claims of 2.975 million.

The U.S. Bureau of Labor Statistics reported that prices for U.S. imports declined 0.6% in May after a 0.7% drop the prior month thanks to falling fuel and nonfuel prices, reflecting subdued inflation pressures. U.S. export prices fell 0.5% after a decline of 0.7% in April.

At 10 a.m. EDT, the Census Bureau is expected to report that business inventories rose 0.3% in April after being flat for a second consecutive month in March.

The Nikkei 225 in Japan plunged 6.35% to finish at 12,445.38, dipping into bear market territory as the yen surged to its highest level against the U.S. dollar since the Bank of Japan introduced its aggressive economic stimulus package. Earlier this week, Japan's central bank announced its decision to refrain from further stimulus measures, hurting sentiment among some investors. The Hong Kong Hang Seng index fell 2.19% after re-opening after a public holiday on Wednesday.

European markets followed the Asian markets with declines of their own, with the FTSE 100 in London falling 0.69% and the DAX in Germany declining 1.2%. Last week, European Central Bank President Mario Draghi played down expectations that the central bank will do much more beyond continuing to pledge to do whatever it takes to defend the euro.

The benchmark 10-year Treasury was rising 8/32, diluting the yield to 2.205%. The dollar was down 0.14% to $80.83 according to the U.S. dollar index.

July oil futures were falling 52 cents to $95.36 a barrel, while August gold futures were sliding $9.20 to $1,382.80 an ounce.

U.S. stocks sank Wednesday as uncertainty about the direction of global stimulus programs put a brake on sentiment that the recovery of the world's largest economy may be strengthening.

Written by Andrea Tse in New York

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