Stocks declined this morning after the Labor Department said the number of people continuing to receive unemployment benefits hit a record of nearly 6.7 million, the Associated Press reported.

The Dow Jones industrial average was down 124.33 points to 8,297.71 as of 11:10 a.m. The Standard & Poor’s 500 index was down 13.21 points to 890.26.

Initial claims for unemployment benefits fell to a seasonally adjusted 631,000 last week from a revised 643,000 the previous week. Meanwhile, continuing claims, which are a week behind, hit their highest level on records dating back to 1967.

Factory shutdowns at Chrysler LLC and General Motors Corp. have boosted jobless claims after they had begun to decline earlier this month.

According to documents released by the Federal Reserve yesterday, the government expects the economy will start to expand later this year, though the unemployment rate could rise to 9.6 percent this year and remain elevated until 2011.

The Conference Board’s index of leading economic indicators also rose 1 percent in April, which means economic activity could pick up in the second half of the year. The index forecasts activity for the next three to six months and looks at 10 components including stock prices, jobless claims and new orders by manufacturers.