Global Markets Overview

The financial sector led U.S. stocks lower Thursday following less than stellar results from J.P. Morgan Chase & Co., although strength in technology stocks kept the broader market's losses in check. The Dow Jones Industrial Average was down 59 points, or 0.5%, at 11459 in Thursday afternoon trading, after earlier dropping as much as 141 points. The Standard & Poor's 500-stock index eased 5 points, or 0.4%, to 1202. Financial and industrial stocks registered the biggest declines, while technology stocks rose. The Nasdaq Composite erased early losses and rose 6 points, or 0.2%, to 2611. Google rose 1.1% ahead of its quarterly results. Financial stocks notched the sharpest drop Thursday. J.P. Morgan Chase reported a slight drop in third-quarter earnings. Investment-banking operations were weak, as expected, and took a toll on results, although the damage was partially offset by strong lending to businesses and revenue gains in the consumer business. Shares fell 5%. Other bank stocks also slumped. Bank of America Corp. dropped 4.9%, while Citigroup Inc. lost 5.2% and Morgan Stanley shed 5.4%. The market largely shrugged off news that Slovakia's parliament, in a repeat vote, approved plans to allow the European Financial Stability Facility to become operational. Slovakia was the last country in the 17-member euro zone to vote on the bailout fund.

Stock markets in Europe and the U.S. fell Thursday, with financial stocks posting the steepest losses as investors questioned recent efforts by European policy makers to tackle the debt crisis, while also feeling the pinch of downbeat earnings from J.P. Morgan Chase and weak trade data from China. Thursday's mood in Europe was soured as recent hopes euro-zone authorities might be on the cusp of a solution to the debt crisis started to fade. Traders said the market was hoping for more detail after European Commission President Jose Manuel Barroso outlined a plan late Wednesday to recapitalize the region's banks, but little was forthcoming. There are more unanswered than answered questions following Barroso's plan, said Credit Suisse. With regard to the underlying problems, while additional capital is welcome, it is unclear how far this plan goes toward addressing the structural problems that are at the sovereign level, it said. The Stoxx Europe 600 banks index fell 3.7% to 138.46 on these worries. The sector was further stung by less than stellar results from J.P. Morgan Chase, which reported a slight drop in third-quarter earnings. At the same time, Fitch Ratings did little to help sentiment surrounding the banking system, as it slashed ratings on Royal Bank of Scotland Group and Lloyds Banking Group after determining they are less likely to receive U.K. government support in the future. Lloyds dropped 5.5% and RBS fell 6.4%. Barclays declined 7.4% after Fitch put the bank on negative rating watch. Against this backdrop, the benchmark Stoxx Europe 600 index ended 1.1% lower at 236.53. Among national indexes, the U.K.'s FTSE 100 index fell 0.7% at 5403.38, while France's CAC-40 index closed 1.3% lower at 3186.94 and Germany's DAX index also closed down 1.3% at 5914.84.

Asian equity markets ended mostly higher Thursday as sentiment improved, tracking gains in Europe and the U.S. Wednesday as a plan to recapitalize European banks began to emerge, with growth-sensitive resources plays among the biggest gainers. Japan's Nikkei Stock Average gained 1.0%, South Korea's Kospi added 0.8%, Hong Kong's Hang Seng Index rose 2.3% and China's Shanghai Composite added 0.8%. Resources stocks were broadly higher as commodity prices recovered Wednesday and amid hopes for Chinese restocking of inventories. Jiangxi Copper's Hong Kong and Shanghai shares rose 11.2% and 1.4% respectively. In Tokyo, Sumitomo Metal Mining added 1.5%. In Tokyo, foreign currency-sensitive exporters advanced as the euro-zone banking plan spurred a rise in the euro. Advantest added 5.6%, Sony rose 3.0% and Olympus gained 4.6%.

Base metals on the London Metal Exchange closed lower in a sea of red Thursday as commodities, equities and risk currencies were sold off by investors concerned about the global economic outlook. Disappointing trade figures out of China overnight prompted liquidation across the industry linked metals, while waning optimism over the euro zone and another uninspiring report on the U.S. labor market drove global markets perceived as risky further into negative territory. LME three-month copper virtually erased the previous day's gains, closing down 2.9% at $7,310 a metric ton. A pullback in the euro added to pressure on the base metals, which are priced in dollars. Oil futures slumped Thursday after the U.S. government said oil inventories unexpectedly rose last week, signaling weaker demand for crude in the world's biggest oil consumer. Light, sweet crude for November delivery settled down $1.32, or 1.5%, to $84.63 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange recently traded down 14 cents, or 0.1%, to $111.22 a barrel. U.S. oil stockpiles rose 1.3 million barrels last week, according to a weekly survey by the U.S. Energy Information Administration. The rise came as refiners slashed their operations by 3.5 percentage points. Gold and silver futures fell, as a stronger dollar and losses in other markets

pressured prices. The most actively traded contract, for December delivery, settled down $14.10, or 0.8%, at $1,668.50 a troy ounce on the Comex division of the New York Mercantile Exchange. October delivery gold settled 0.8% lower at $1,667.30 an ounce. Silver for December delivery, the most actively traded contract, fell 3.4% to $31.667 a troy ounce.

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