Stock index futures extended losses on Thursday after data showed applications for unemployment insurance unexpectedly rose in the latest week.

S&P 500 futures dropped 23.2 points and were sharply 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 168 points and Nasdaq 100 futures slid 38.25 points.

Futures fell earlier hit as uncertainty grew about the direction of European policy following Germany's unilateral ban on certain stock and bond transactions earlier in the week.

(Reporting by Rodrigo Campos; Editing by Padraic Cassidy)