U.S. stocks and exchange traded funds (ETFs) opened in negative territory this morning on worries of further labor market weaknesses and more fallout from the credit crisis.

The Labor Department reported that initial claims for unemployment was at a seasonally adjusted 631,000 for last week.  This puts the number of people continuing to claim unemployment benefits up to 6.7 million, a record number.

The global credit crisis is far from being over.  Standard & Poor’s stated that it has revised Britain’s credit rating to negative from stable, sparking worries that the nation may lose its AAA credit rating.  The reason for this decline was massive borrowing to deal with the recession and banking crisis, states Pan Pylass of the Associated Press. This lower credit rating will force the British government to pay a higher interest rate to borrow money on bond markets.  This news sent the British Pound tumbling and the CurrencyShares British Pound Sterling Trust (FXB) down nearly 1% in morning trading.

The Treasury Department is not done infusing the nation’s economy with more capital.  The Wall Street Journal reported that the Treasury plans to lend $7 billion to GMAC, making the company a quasi-federal entity with the power to offer low interest rate loans to potential buyers of General Motors (GM) and Chrylser vehicles.  This news comes after the company failed government stress tests and burned through $5 billion it received through the TARP program. This news sent the financial sector down in morning trading, the Financial Select SPDR (XLF) dropped nearly 0.5% in intraday trading.

It appears that Lehman Brothers is still not in the clear.  Regulators are questioning former Lehman executives over their marketing of auction-rate securities and want to know if these Lehman employees knew that the market for these securities was in trouble urging them to sell their own holdings of the securities, reports the Associated Press.

On a positive note, several U.S. leading economic indicators rose more than forecast in April, indicating that the downfall of the overall economy is easing.  Consumer sentiment, a proxy for consumer spending, rose in April; the Conference Board’s index of current economic activity declined 0.2%, after dropping 0.6% the previous month; and the stock prices have risen. The S&P 500 gained roughly 12% in April from the prior month’s average, states Shobhana Chandra of Bloomberg.