U.S. stocks declined in early trade on Thursday after official data showed that applications for jobless benefits in the U.S. rose more than expected last week, after falling to the lowest level since May 2008 in the previous week.

The S&P 500 Index declined 20.89 points, or 1.57 percent, to trade at 1,299.12 at 9:50 a.m. EDT. The Dow Jones Industrial Average fell 189.28 points, or 1.55 percent, to trade at 12,023.80. The Nasdaq Composite Index dipped 1.62 percent.

Initial jobless claims in the US increased by 15,000 to 397,000 compared with the revised figure of 371,000 in the previous week, while markets had expected the jobless claims to rise 382,000 in the week. Also, the seasonally adjusted four-week moving average of initial claims, considered as a more accurate measure of employment trends than the weekly number, increased by 3,000 to 392,250.

Meanwhile, goods and services trade deficit in the U.S. edged up to $46.3 billion in January from the revised figure of $40.3 billion in December.

News from overseas also weighed on the sentiment as European debt concerns resurfaced following Moody’s downgrade of Spain debt.

Moody’s downgraded Spain’s debt by one notch to Aa2, citing concerns over the cost of restructuring of the country’s banking sector and also the government’s ability to reach its borrowing reduction targets. Also, the rating agency on Monday downgraded Greece’s sovereign debt by three notches from Ba1 to B1 with a negative outlook.

China swung to a surprise trade deficit in February of $7.3 billion, its largest in seven years, as the Lunar New Year holiday dealt an unexpectedly sharp blow to exports. Exports grew 2.4 percent in February against analysts’ estimation of 26.2 percent, while imports rose 19.4 percent against expectations of 32.3 percent.

On the corporate front, Starbucks Corp. (NASDAQ:SBUX) shares climbed 7.70 percent after the company agreed to a strategic relationship with smaller rival Green Mountain Coffee Roasters to expand its presence in the new and fast-growing U.S. single-serve coffee market.

H&R Block, Inc. (NYSE:HRB) shares surged 6.71 percent as its third quarter earnings beat estimates. The company reported third quarter net income of $0.06 per shares against analysts’ estimation of $0.05 per share.

The euro declined 0.56 percent to 1.3831 against the dollar and the yen declined 0.30 percent against the greenback.
Crude oil futures declined 1.73 percent to $102.57 a barrel and gold futures declined 1.12 percent.

European stock markets are currently trading lower with FTSE 100 down by 82.01 points, DAX30 down by 85.43points and CAC 40 down by 43.45 points.