FROM MORRISON SECURITIES PTY. LTD:

U.S. STOCK MARKETS

The Dow industrials rose for a third straight session after surprise moves from China's central bankers, but a weak reading on U.S. consumer credit and no new direction from the Fed about potential stimulus kept a lid on gains.

Stocks opened sharply higher after the People's Bank of China lowered its benchmark interest rate for the first time since 2008, an effort meant to rekindle its flagging economy.

Major stock-market benchmarks eased back from their session's highs after Federal Reserve Chairman Ben Bernanke stopped short of signaling new stimulus measures in testimony before Congress.

Investors were interested in whether he would hint at additional stimulus action. The Dow Jones Industrial Average climbed 46.17 points, or 0.37%, to 12460.96. Utilities stocks led Thursday's advance, followed closely by industrial stocks. United Technologies added 2.4% as the Dow's biggest gainer.

Bank of America fell the most among blue chips, down 2.9%. The Standard & Poor's 500-stock index lost 0.14 point, or 0.01%, to 1314.99, while the Nasdaq Composite lost 13.70 points, or 0.48%, to 2831.02.

Both benchmarks gave back strong gains in the final minutes of Thursday's session to snap three-session streaks of gains. The late-session backed up a bit following a report that showed U.S. consumer credit grew at a slower pace than expected in April.

In other U.S. economic news, the number of U.S. workers filing for initial unemployment benefits fell for the first time in more than a month.

In corporate news, Lululemon Athletica slid 8.8% after the maker of high-end yoga wear offered a weaker-than-expected outlook for the current quarter, though its quarterly results beat analyst expectations.

Medicaid insurer Molina Healthcare tumbled 31% after suspending full-year earnings guidance while it sorts out problems in new Texas markets. Navistar International dropped 14% after the commercial truck maker swung to a surprise fiscal second-quarter loss.

EUROPEAN STOCK MARKETS

European stocks rose Thursday as investors cheered an interest-rate cut from China and a favorably received auction of Spanish government debt.

The Stoxx Europe 600 index extended gains into a third straight trading day, closing up 1.1% at 242.64. The U.K.'s FTSE 100, which has had its best two-day performance in more than six months, finished 1.2% higher at 5447.79.

Germany's DAX ended up 0.8% at 6144.22 and France's CAC-40 gained 0.4% to 3071.16. Since Wednesday, markets have been driven by expectations of additional fiscal stimulus by central banks, with particular attention on the European Central Bank and the Federal Reserve.

But China's central bank delivered, saying it would lower benchmark interest rates on loans and deposits by 0.25 percentage point. The surprise move boosted resources firms and lifted U.K. mining companies out of negative territory.

Rio Tinto added 4%, BHP Billiton rose 2.5% and Vedanta Resources gained 2.3. In the second half of the session, U.S. Federal Reserve Chairman Ben Bernanke's testimony on the economic outlook dashed hopes of further quantitative easing.

He reiterated that the Fed is ready to act to protect the U.S. economy and financial system if stresses escalate, but stopped short of signaling any further easing.

In the U.K., the Bank of England kept interest rates unchanged at 0.5%, as widely expected, while leaving its asset purchases on hold at GBP325 billion ($503.7 billion).

Some market participants had been expecting further monetary stimulus to be announced, although these expectations were scaled back after the U.K. services PMI reading for May came in ahead of estimates.

Earlier, a well received bond auction by Spain helped to underpin sentiment. Spain sold EUR2.074 billion ($2.61 billion) of government bonds, slightly above the upper end of its target range.

Although borrowing costs rose from the previous auction, average yields were lower than secondary market levels prior to the sale, indicating decent demand. The IBEX 35 index inched 0.3% higher to 6,438.10, well below its intraday high of 6,537.80, trimming gains after Bernanke's testimony.

Banks were among major advancers in Europe. Commerzbank jumped 5.7%. In Sweden, shares of Skandinaviska Enskilda Banken rose 4.8%, Nordea Bank added 3.2% and Swedbank moved 4.5% higher, helping Sweden's OMX Stockholm 30 to rise 3.2% to 981.95. In France, telecom-equipment producer Alcatel-Lucent rose 1.8% and Accor SA gained 3.2%.

ASIA-PACIFIC STOCK MARKETS

Asian shares were mostly higher Thursday amid signs central bankers in Europe and the U.S. may take extra steps to aid the slowing worldwide economy.

Investors were looking ahead to Fed Chairman Ben Bernanke's testimony on the U.S. economic outlook later in the day.

Japan's Nikkei gained 1.2% to 8639.72, Hong Kong's Hang Seng Index was 0.9% higher at 18678.29, and the China Shanghai Composite dropped 0.7% to 2293.13.

The Kospi gained 2.6% to 1847.95 as the South Korean index played catch-up after closing for a public holiday Wednesday.

Foreign investors, who were net-sellers in 22 of the past 25 sessions, appeared to regain confidence in the market, buying a net KRW361 billion in shares.

Thursday was another good day for Japanese exporters, as the weakening yen encouraged investors to shift into companies that sell abroad and away from domestic-focused retailers.

Shoe retailer ABC-Mart was 0.8% lower, while Sony climbed 2% and construction machinery manufacturer Komatsu gained 2.1%.

Taiwanese phone maker HTC dropped 6.9% after it revised second-quarter revenue guidance by 13% late Wednesday, citing poor sales in Europe and delayed shipments in the U.S.

China's shares ended lower as concerns about the domestic economic slowdown continued to dominate, with coal miners leading the decline.

Yanzhou Coal lost 1.4%, extending a 5.8% fall in the previous three sessions, and Pingdingshan Tianan Coal fell 1.7% after dropping 5.6% over the same period.

News China's central bank was cutting its benchmark one-year lending and deposit rates by 0.25 percentage point, effective from Friday, came after the market close.

COMMODITIES

Base metals closed higher on the London Metal Exchange Thursday, although early gains were pared following U.S. Federal Reserve Chairman Ben Bernanke's much-awaited testimony to Congress.

At the close, LME three-month copper was 1.1% higher at $7,490 a metric ton. Aluminum ended the session 0.7% higher at $1,992/ton.

Copper rallied to an eight-day high as $7,585/ton Thursday following a surprise interest-rate cut in China. Since China is the world's top consumer of metals, the move was taken as a bullish signal by base metal market participants.

Crude-oil futures turned weaker Thursday, erasing early strong gains after Federal Reserve Chairman Ben Bernanke stopped short of signaling imminent new Fed action to stimulate the economy.

Crude oil had moved higher after China cut interest rates by 0.25 percentage point, with gains building to a one-week intraday high above $87 on anticipation that Mr. Bernanke would offer clear signs of the Fed's intentions.

Light, sweet crude oil for July delivery on the New York Mercantile Exchange settled 20 cents lower at $84.82 a barrel. ICE Brent crude oil for July settled 71 cents lower, at $99.93 a barrel Thursday.

Gold futures slumped, closing below $1,600 an ounce for the first time in a week after Bernanke didn't describe any new monetary easing measures while speaking to Congress.

Gold had rocketed past $1,600 an ounce after a poor U.S. jobs report led some investors to believe further monetary easing might be on its way.

The most actively traded gold contract, for August delivery, Thursday dropped $46.20, or 2.8%, to settle at $1,588.00 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement price since May 31.