Wall Street was set to drop about 1 percent at the open on Thursday after the latest data on the labor market further confirmed investor fears of a slowdown in the economy.

Energy stocks looked to get hit early as oil futures fell 4 percent after the International Energy Agency said it would release crude oil from its strategic reserves. For details, see

New U.S. claims for unemployment benefits rose more than expected last week, suggesting little improvement in the labor market this month after employment stumbled in May.

The data came a day after a more pessimistic outlook on the economy from Federal Reserve Chairman Ben Bernanke. He cut forecasts for U.S. economic growth and offered no hint of further monetary support, giving investors a reason to sell after a four-day rally that lifted stocks from three-month lows.

The claims just added fuel to the fire here ... two months now stuck in this range and they just won't budge. That is certainly a disappointment. We'll see if (investors) really start selling here, but it looks like the S&P is going to test that low of 1,250, said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

S&P 500 futures fell 12.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 93 points, and Nasdaq 100 futures shed 19 points.

In company news, Bristol-Myers Squibb Co rose 7.1 percent to $29.70 in premarket trade after the company said a blood thinner it developed along with Pfizer Inc

proved safer than warfarin in preventing strokes. Pfizer shares rose 3.6 percent to $21.00.

U.S. stocks dropped Wednesday, halting four days of gains, after the Fed cut its forecasts for U.S. economic growth this year and next.

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(Reporting by Angela Moon; editing by Jeffrey Benkoe)

Ben Bernanke