The Dow industrials fell, on pace to decline for a fifth time in six sessions, as mixed quarterly earnings curbed sentiment ahead of Friday's readings on jobs.

U.S. STOCK MARKETS

The Dow Jones Industrial Average dropped six points, or 0.1%, to 12711, in Thursday afternoon trading, remaining just below a six-month high.

The Standard & Poor's 500-stock index rose two points, or 0.2%, to 1329, and the technology-oriented Nasdaq Composite edged up 10 points, or 0.4%, to 2858, and is up 9.7% this year.

Drug makers weighed down the Dow. Pfizer fell 1.2%, while Merck shed 0.7% after reporting fourth-quarter revenue that fell shy of expectations.

Alcoa led among Dow components, climbing 2.1%, while Bank of America climbed 1.4%. A reading that showed initial unemployment claims decreased by 12,000, to 367,000, last week slightly beat expectations.

On Friday, the monthly report on nonfarm payrolls and the unemployment rate will be released. Investors also watched for signals from Federal Reserve Chairman Ben Bernanke, who testified before U.S. lawmakers Thursday.

Bernanke described the pace of the U.S. economic recovery as frustratingly slow, although he said the Fed anticipated higher levels of growth in the coming year than were seen in 2011. Bernanke also warned of the importance of addressing fiscal challenges in the U.S., pointing to the Europe's sovereign-debt crisis as an example of out-of-control fiscal policies.

Abercrombie & Fitch skidded 11%, the worst performer on the S&P 500, after the apparel retailer indicated that fiscal fourth-quarter earnings would fall well short of expectations. Fellow retailer Ann slid 8.5% after the company said fiscal fourth-quarter results would be below expectations, citing a significantly higher than anticipated promotional environment in its Ann Taylor stores.

EUROPEAN STOCK MARKETS

European stock markets edged higher Thursday, supported by strong U.S. macroeconomic data and a mining-sector rally after Xstrata PLC confirmed it's in merger talks with Glencore International PLC. Shares of Xstrata surged 9.9% and those of Glencore rallied 6.9%.

News of the merger talks between the two commodities firms pushed the mining sector higher. Vedanta Resources PLC gained 5.8%, Rio Tinto PLC advanced 1.8%, and Randgold Resources Ltd. climbed 1.6%.

The pan-European Stoxx 600 index closed 0.2% higher at 260.11, holding on to a six-month high. France's CAC 40 index rose 0.3% to 3,376.66, while Germany's DAX 30 index was up 0.6% at 6,655.63. The U.K.'s FTSE 100 index nudged 0.1% higher to 5,796.07.

Stock markets spiked after data from the U.S. showed productivity up 0.7% in the fourth quarter of 2011 and initial jobless claims down 12,000 at a seasonally adjusted 367,000 in the week ended Jan. 28. Investors also digested news that the Spanish Treasury sold nearly EUR4.6 billion of government debt and saw its borrowing costs decline.

France was also active in the bond markets, selling EUR7.96 billion of government debt. Elsewhere, investors continued to await a conclusion to talks between Greece and its private-sector creditors.

Negotiators representing bond holders said late Wednesday that the talks had progressed and would be completed in days. The Athens General Index fell 0.5% to 792.44.

In London, Unilever PLC fell 4.4% after posting a small rise in profit, but giving a cautious outlook for 2012. AstraZeneca shed 3.4% as the drug maker saw lower profit in the fourth quarter. Oil major Royal Dutch Shell PLC fell 1.2% after its earnings missed analyst expectations. Other oil companies also weighed on markets, with BP PLC shedding 1.1%, Cairn Energy PLC dropping 1.7% and A.P. Moeller-Maersk A/S down 1.1%. In Germany, shares of Deutsche Bank AG fell 0.4% after it reported a 76% decline in fourth-quarter profit.

ASIA-PACIFIC MARKETS
Asian markets were powered Thursday by commodity and financial stocks after an improvement in manufacturing data buoyed global equities.

Hong Kong's Hang Seng Index added 2% to 20,739.45, while the Shanghai Composite Index also added 2%, to end at 2,312.56. Japan's Nikkei Stock Average added 0.8% to 8,876.82. South Korea's Kospi gained 1.3% to 1,984.30, and Taiwan's Taiex rose 1.4% to 7,652.46.

Commodity-related firms were higher as positive manufacturing data worked to soothe worries about the trajectory of global growth and subsequent commodity demand. Aluminum Corp. of China Ltd., or Chalco, rose 3.8% and oil major Cnooc Ltd. rallied 4.1% in Hong Kong; in Shanghai, shares of Chalco added 2.3%, Jiangxi jumped 4% and Zhongjin Gold Corp. climbed 3.3%.

Many Japanese car makers sped higher on strong U.S. car sales figures for January, including Toyota Motor Corp., which rose 1.8%, while Honda Motor Co. climbed 1.8%. In the banking sector, Japanese banking giant Mitsubishi UFJ Financial Group Inc. jumped 2.5% after reporting a 48% increase in its nine month net profit, while Nomura Holdings Inc. surged 7.1% after reporting a surprise profit of its own.

In Hong Kong, heavyweight HSBC Holdings PLC rose 3.2%, while Industrial & Commercial Bank of China Ltd. climbed 3.5%. Meanwhile, shares of Sharp Corp. were hammered down 15.9% in Tokyo after the Japanese consumer-electronics group said that it expected a record net loss of Y290 billion ($3.81 billion) for the current fiscal year.

COMMODITIES
Base metals closed lower on the London Metals Exchange Thursday, following a quiet day of trading that saw markets follow macro newsflow ahead of Friday's key economic data.

At the close, LME three-month copper was 1.1% lower at $8,344 a metric ton. Tin performed the best of the complex, closing down just 0.02% at $24,145/ton. U.S. crude oil futures traded at six-week lows Thursday, weighed down by weak demand and rising inventories.

Meantime, globally traded North Sea Brent crude advanced for a fourth day, as analysts said refiners were lining up alternatives to Iranian oil ahead of tightening sanctions which include a European Union embargo. Light, sweet crude oil futures on the New York Mercantile Exchange settled 1.3% lower at $96.36 a barrel, a six-week low. Crude has shed 3.4% over five days.

Gold futures gained for the sixth time in seven sessions, settling at the highest level in 11 weeks as the Federal Reserve chief urged Congress to tackle the fiscal challenges facing the U.S. Gold for April delivery, the most actively traded contract, rose $9.80, or 0.6%, to settle at $1,759.30 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest settlement price since Nov. 16.