Stocks opened lower on Thursday as signs of further labor market weakness fueled doubts about a quick economic recovery and Britain's reduced rating outlook signaled more fallout from the credit crisis.

The number of U.S. workers filing new claims for jobless aid fell by 12,000 last week, Labor Department data showed, while so-called continued claims rose to a new record as the recession battered employment.

The Dow Jones industrial average <.DJI> dropped 124.97 points, or 1.48 percent, to 8,297.07. The Standard & Poor's 500 Index <.SPX> fell 12.43 points, or 1.38 percent, to 891.04. The Nasdaq Composite Index <.IXIC> shed 20.38 points, or 1.18 percent, to 1,707.46.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)