Updated at 12:20 p.m. ET

U.S. markets trimmed earlier losses but remained lower after U.S. reports showed jobless claims fell less than forecast, while the Philadelphia Federal Reserve Bank's gauge of regional manufacturing activity remained sluggish. Investors were also concerned about the global economy after weak data from China and eurozone.

The Dow Jones Industrial Average ($INDU) was down 11 points at 13,567. The S&P 500 ($INX) was down 4 points at 1,458. The Nasdaq Composite ($COMPX) was down 12 points at 3,171.

In the U.S., applications for jobless benefits fell by 3,000 to a seasonally adjusted 382,000 in the week ended Sept. 15, the Labor Department said Thursday. Economists expected claims to drop to 375,000, according to Briefing.com. Levels near a two-month high suggested some weakening in the labor market.

The four-week  average, which economists see as a better gauge, rose by 2,000 to 377,750, the highest level since late June. It was the fifth week of increases.

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The Philadelphia Federal Reserve Bank September business activity improved slightly to minus 1.9 from minus 7.1 in August. Economists forecast a reading of minus 4, according to Briefing.com. The reading, however, remained negative, indicating a contraction. The index has been in negative territory for five straight month.

Leading economic indicators ticked down 0.1% in August, slightly below economists' forecast of no change. Meanwhile, the longer-term trend remained positive. U.S. economic growth is "unlikely to change much" in the near term, the Conference Board said Thursday.

Manufacturing in China contracts again
China's manufacturing activity contracted in September for the 11th straight month. The preliminary HSBC China Manufacturing Purchasing Managers Index rose to slightly to 47.8 in September from a final reading of 47.6 in August.

While the uptick suggests stabilization, the level is still in the contractionary territory of below 50. The pressure on the manufacturing industry in the world's No. 2 economy likely also indicates it remains on track for a seventh quarter of slowing growth.

Chinese stocks stumbled to their lowest level since February 2009 to lead Asian markets lower after the data. It didn't help that Japan's trade deficit widened in August from a month earlier as both exports and imports fell. Japan's data, however, was above expectations.

Eurozone private sector also contracts
In the eurozone, private-sector activity also contracted. The September index fell to 45.9 from 46.3 in August, below forecasts for 46.7 This was also the fastest pace of contraction since June 2009, despite some positive signals recently out of Germany, the region's largest economy.

European stock markets took a beating after the release of the Chinese and European data.

Stocks to watch
Bank of America (BAC) is accelerating a broad cost-cutting plan and has set a target of shedding 16,000 jobs by year's end, The Wall Street Journal reported. After the cuts, the bank will no longer be the largest employer in the U.S. banking sector.

Rite Aid (RAD) reported a narrower second-quarter loss of $41.4 million, or 5 cents a share, as revenue dipped slightly to $6.23 billion. Wall Street analysts had expected the company to lose 7 cents a share on revenue of $6.2 billion.

Nike's (NKE) board has approved an $8 billion share-buyback plan over the next four years.

Norfolk Southern (NSC) shares fell after the second-biggest eastern U.S. railroad  reported that its third-quarter profit missed analysts' estimates as a result of dwindling volumes.

Trulia (TRLA), the real-estate information site, priced its initial public offering at $17 a share, reportedly raising more than $100 million. Shares are set to open for trading on the New York Stock Exchange this morning.

Adobe Systems (ADBE) advanced after the software maker issued a weaker-than-expected​ fiscal-fourth-quarte​r profit outlook after Wednesday's close.

Bed Bath & Beyond (BBBY) shares slumped after the retailer late Wednesday reported second-quarter earnings that fell short of forecasts.

Green Mountain Coffee Roasters (GMCR) shares fell as Starbucks (SBUX) rolled out its Verismo-branded line of single-serve coffees, along with a selection of electric brewers. 

CarMax (KMX) said its second-quarter profit increased slightly to $111.6 million, or 48 cents a share, missing analysts' expectations.