Positive data and hopeful testimony from Treasury Secretary Tim Geithner at 10 am haven’t been enough to push markets higher following a lower opening on Thursday. Investor sentiment remains weary from Wednesday’s slide and a sour Jobless Claims report an hour before the opening bell.

Roughly 90 minutes into the session, the S&P 500 was down 2.06% to 885, the Nasdaq had lost 1.88% to 1695, and the Dow has shed 1.77% to 8273.

The day began on a poor note as the Dept. of Labor said 631,000 people filed for first-time unemployment benefits in the week ending May 16, compared to an upwardly revised 643,000 is the previous week. 

Continuing Claims ― representing people still receiving benefits ― climbed 75k for the week ending May 9 to 6.662 million, a new all-time high. 

Ian Pollick from TD Securities said the continuing claims figure “screams loud and clear that job destruction continues to outpace job creation.” He added, “It is safe to say that until U.S. economic activity begins to pick up, the level of continuing claims will likely continue to increase, at least in the near-term.”

At 10 am, however, two releases were more encouraging.

The Philadelphia Federal Reserve’s manufacturing improved slightly to -22.6 this month, from -24.4 in April. Though still indicative of widespread deterioration in overall conditions, the improvement marks the third straight month of advances.

“Although the indexes for general activity, shipments, and employment improved, the index for new orders declined slightly,” a press release said. 

At the same time, the Leading Indicators Index, a forward-looking survey of the nationwide economy, improved for the first time in ten months with a 1.0% advance in April.

“The level of the index of leading indicators is up 2.9% annualized relative to its Q1 average, suggesting that the economy should turn up within the next six months,” said DeutscheBank chief U.S. economist Joseph LaVorgna. 

In testimony to the House Appropriations subcommittee, Treasury Secretary Timothy Geithner said the Troubled Asset Relief Program was “proving effective” in stabilizing the financial system. Going forward, he said Treasury must strike a “delicate balance” between market forces and government intervention.

"We must get our fiscal house in order or risk having government borrowing crowd out productive private investment," he said in prepared testimony to the House Appropriations subcommittee on Thursday.

No more data is scheduled for the rest of the day. Once markets close, two officials from the Fed will give an update on the economic outlook. 

Charles Plosser, president of the Philadelphia Fed, will speak before Money Marketeers of New York University at 7 pm, while his equivalent at the Boston Fed, Eric Rosengren, will address the Worcester Economic Club at 7:45 pm.