Shares of GM dropped more than 13 percent before the bell to $1.91, albeit in light volume.
A day after Wall Street mounted a relief rebound after a 5-day slide, the GM news added to anxiety as investors braced for a report on weekly jobless claims that may show yet more weakness in the labor market.
GM said if it was unable to successfully reorganize and if debtor-in-possession financing was unavailable, it would be forced to liquidate under Chapter 7 of the U.S. bankruptcy code.
When people hear the word bankruptcy it immediately brings up negative connotations, said Andre Bakhos, president of Princeton Financial Group in New Brunswick, New Jersey.
It appears that the battle is being lost. It doesn't add confidence. This market is being driven by pure emotion.
S&P 500 futures fell 12.40 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 98 points, and Nasdaq 100 futures dipped 12 points.
Shares of General Electric also slid 4.2 percent to $6.41 before the bell as investors fretted about fallout from its embattled finance arm and worried about a possible downgrade of GE's credit rating. On Wednesday, GE shares touched their lowest since 1991.
Weekly jobless claims are due at 8.30 a.m., along with a report on fourth-quarter productivity and costs. January factory orders are due at 10 a.m..
U.S. stocks rallied on Wednesday, ending a five-day losing streak that took shares to 12-year lows, as reports of another Chinese stimulus package boosted commodity prices, encouraging investors to jump into energy and natural resource shares.
(Editing by James Dalgleish)