Stocks are set to open the third quarter by extending the losses of the previous quarter.

Futures fell modestly Thursday as investors worry the economy is slowing down again, and they are anxious heading into Friday's key jobs report. Before the monthly employment report, traders will get a flood of economic data to examine Thursday that will likely continue to paint a mixed picture about the pace of recovery.

A report is expected to show initial claims for jobless benefits dipped last week, but not enough to signal employers are rapidly hiring new workers. Economists polled by Thomson Reuters forecast claims fell to 452,000 last week from 457,000 a week earlier. Initial claims have remained stuck near 450,000 throughout the year, adding to worries that unemployment will remain high for the near future.

Two reports on the housing market are also expected to show that sector remains weak, particularly now that a home buyer tax credit has expired.

Economists predict construction spending fell by 0.8 percent in May, the first month after the tax credit ended. A separate reading is expected to show pending home sales fell sharply in May as well. The National Association of Realtors' pending home sales index likely fell to 98.4 in May from 110.9 in April.

The one area of the economy that has shown signs of life throughout the year is manufacturing. The Institute for Supply Management's manufacturing index likely dipped in June, but still signaled growth in the sector. Economists expect the index fell to 59 from 59.7 in May. Any reading above 50 signals expansion.

Still, growth in manufacturing has not been enough to overcome the ongoing problems in the jobs and housing markets. The pace of recovery in recent months has fallen short of what investors had hoped, which has helped drive stocks sharply lower.

Ahead of the opening bell, Dow Jones industrial average futures fell 16, or 0.2 percent, to 9,700. Standard & Poor's 500 index futures fell 2.50, or 0.2 percent, to 1,024.10, while Nasdaq 100 index futures dropped 5.50, or 0.3 percent, to 1,732.50.

A disappointing report on private sector employment from payroll company ADP on Wednesday sent stocks tumbling on the final day of a dreadful second quarter. The Dow plummeted 10 percent in the second quarter, while the S&P 500 fell 11.9 percent.

The ADP report also sparked fresh concerns that the Labor Department's upcoming monthly report will show weakness in the jobs market.

Economists forecast employers cut 110,000 jobs last month, though that number is skewed by the government laying off temporary employees hired to work on the 2010 census. The unemployment rate likely rose to 9.8 percent in June from 9.7 percent in May.

High unemployment remains one of the biggest obstacles to a strong recovery. Even those who are working appear tentative and unsure about a recovery. Consumer confidence fell sharply in June and spending has not picked up as fast as investors might have hoped.

With the market so unsettled, investors are giving up potential big gains in stocks and opting for the smaller, but safer gains that can be made in bonds. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 2.94 percent compared with late Wednesday. Its yield fell below 3 percent this week for the first time in more than a year, a sign bond investors do not trust a strong recovery is coming anytime soon.

Overseas, Britain's FTSE 100 dropped 0.8 percent, Germany's DAX index fell 0.6 percent, and France's CAC-40 fell 1.5 percent. Japan's Nikkei stock average fell 2 percent.