U.S. STOCK MARKETS

The Dow industrials fell the most in more than a month Thursday amid mounting doubts about the prospect of more stimulus from the Federal Reserve and concerns about the sustainability of the market's summer gains.

The Dow Jones Industrial Average gave up 115.30 points, or 0.9%, to 13057.46, its biggest drop since July 20. The pullback further trimmed a nearly 10% rally from the blue-chip benchmark's early-June lows through Friday, the latest day the average notched an increase.

The Standard & Poor's 500-stock index slipped 11.41 points, or 0.8%, to 1402.08, and the Nasdaq Composite Index dropped 20.27 points, or 0.7%, to 3053.40.

Weighing on investors' minds, Federal Reserve Bank of St. Louis President James Bullard in an interview on CNBC said Fed policy makers may hold off on further efforts to bolster the economy because of continued modest economic growth in the U.S.

Materials shares in the S&P 500 fell the most of the index's 10 sectors. U.S. Steel dropped 6.9% and Nucor fell 3.5% after Dahlman Rose analysts lowered their rating on both stocks to "hold" from "buy."

Dow component Hewlett-Packard tumbled 8.2% after the personal-computer maker late Wednesday projected full-year adjusted earnings at the low end of its previous forecast.

The company's quarterly revenue missed analysts' forecasts as PC sales tumbled. The number of U.S. workers filing initial claims for jobless benefits in the latest week rose by 4,000 from the prior week's upwardly revised figure, topping economists' forecasts.

New-home sales rose in July, the third increase in the past four months, the Commerce Department reported. The increase topped economists' expectations.

Meanwhile, the Federal Housing Finance Agency reported a bigger-than-expected advance in June house prices. The purchasing managers' index compiled by data provider Markit rose to 51.9 in August from the final reading of 51.4 in July.

In other corporate news, Boeing fell 3.4% after Australia's Qantas Airways canceled orders for 35 aircraft with a list price of $8.5 billion. Big Lots plunged 21%, leading the S&P 500 lower, after the closeout retailer missed fiscal second-quarter earnings and revenue estimates, lowered its full-year earnings outlook and announced several executive changes.

EUROPEAN STOCK MARKETS

Hopes for further monetary stimulus in the U.S. failed to sustain a positive trading session for European stock markets Thursday, as weak euro-zone data and comments by German Finance Minister Wolfgang Schaeuble on Greece weighed on sentiment.

The Stoxx Europe 600 index lost 0.6% to close at 267.69, its lowest level since Aug. 6. Early gains were undercut after a preliminary August euro-zone composite purchasing managers' index compiled by data research firm Markit indicated private-sector activity in the region continued to contract at a rapid pace.

Risk-sensitive sectors, such as banks and resource firms, were among the biggest movers on European stock markets. Barclays PLC gave up 1.6% and Royal Bank of Scotland Group PLC fell 3.3%. French oil group Total SA lost 1.1% as Moody's Investors Service changed the outlook on the firm's credit rating to negative from stable.

Bucking the trend, Credit Suisse Group AG added 0.6% on the back of an upgrade to buy from hold by Deutsche Bank. Broader sentiment was initially lifted by hopes that the U.S. Federal Reserve will push the button for another round of quantitative easing, after minutes from the Federal Open Market Committee's July 31-Aug. 1 meeting showed policy makers actively discussed fresh bond purchases.

In China, speculation about further monetary stimulus was also on the agenda as a weak manufacturing PMI raised calls for Beijing to act to stimulate growth in the country.

Additional pressure on European shares came as German Finance Minister Wolfgang Schaeuble told a German radio broadcaster that giving Greece more time or money to implement austerity measures wouldn't help the country out of its problems.

Spain's IBEX 35 index dropped 0.8% to 7,282.90. The loss was trimmed in late action after a news report that Spain is in discussions with its euro-zone partners over conditions for possible aid, although the government had made no decision on whether to seek a bailout.

In Germany, utility firms weighed on the DAX 30 index, which shed 1% to 6,949.57. RWE AG fell 2.1%, while E.ON AG fell 1.6%. France's CAC 40 index slipped 0.8% to 3,432.56. Credit Agricole SA lost 1.3% and BNP Paribas SA gave up 0.7%.

The U.K. FTSE 100 index closed slightly higher at 5,776.60, partly lifted by the country's mining sector as metals prices moved higher. Vedanta Resources PLC rose 1% and BHP Billiton PLC added 0.7%.

ASIA-PACIFIC STOCK MARKETS

Asian markets ended higher Thursday as hopes for stimulus out of the U.S. outweighed gloomy manufacturing data from China.

Minutes from the U.S. Federal Reserve's most recent meeting showed that many members of the central bank's policy-setting committee were in favor of introducing more stimulus if there is no recovery in economic growth.

Markets stumbled during the session when HSBC's preliminary China purchasing managers index for August showed a fall to 47.8, compared with a final reading of 49.3 in July.

A stronger yen initially weighed on the Nikkei, but the market turned positive to finish the day up 0.5% at 9178.12. South Korea's Kospi was up 0.4% at 1942.54.

Along with easing hopes, corporate earnings took center stage in Hong Kong, where the Hang Seng Index rose 1.2% to 20,132.24. Local developers soared after releasing strong first-half earnings reports, with Henderson Land Development jumping 4.7% and Wharf (Holdings) also advancing 4.7%.

In mainland China, the Shanghai Composite ended 0.3% higher at 2113.07. In Vietnam, the Ho Chi Minh Index lost 4.2%, as investor confidence plunged with another arrest of a chief executive, as police in Ho Chi Minh City detained Ly Xuan Hai of Asia Commercial Bank. Military Bank lost 4.3%, Sacombank was 4.8% lower, and Eximbank finished 4.8% lower.

COMMODITIES

Base metals closed higher on the London Metal Exchange Thursday, boosted by a mixture of dollar weakness and rising hopes for U.S. and Chinese stimulus, although there were some doubts as to whether or not bullish positions driven by stimulus hopes were premature or even misplaced, as gains began to lose steam somewhat.

At the close, LME three-month copper closed up 1.1% at $7,684.5 a metric ton. Crude-oil futures eased 1% Thursday as markets soured on the likelihood of Federal Reserve stimulus actions, analysts and traders said.

Light, sweet crude for October delivery settled down 99 cents, or 1%, at $96.27 a barrel on the New York Mercantile Exchange. October Brent crude on ICE Futures Europe settled up 10 cents, or 0.1%, at $115.01 a barrel.

Gold futures settled at their highest level in more than four months as speculation about a third liquidity injection from the Federal Reserve intensified.

Gold for December delivery, the most actively traded futures contract, rose $32.30, or 2%, to settle at $1,672.80 a troy ounce on the Comex division of the New York Mercantile Exchange. That is the highest settlement price since gold ended at $1,680.60 a troy ounce on April 12. Compiled from MORRISON SECURITIES PTY. LTD.