US Markets

U.S. stocks gained in the second-to-last trading session of 2011, boosted by data that showed a modest improvement in the U.S. housing and employment sectors and a drop in borrowing costs for heavily indebted Italy. The Dow Jones Industrial Average was up 101 points, or 0.8%, at 12252 Thursday afternoon. The gains took back more than half of the 140-point decline Wednesday, the measure's biggest single-day loss in more than two weeks. The Standard & Poor's 500-stock index rose 9 points, or 0.8%, to 1259, pushing the measure back into positive territory for 2011 by a fraction. The Nasdaq Composite added 18 points, or 0.7%, to 2608. Financial stocks paced the blue-chip measure's gains, with Bank of America rising 2.4% and J.P. Morgan Chase up 2%. Market activity was light as more traders closed up their books for the year. About 1.2 billion shares had changed hands in New York Stock Exchange composite volume by early afternoon. This year's full-day average is about 4.3 billion. Leading the U.S. data was a slight rise in initial jobless claims to a seasonally adjusted 381,000 last week. Although the figure was higher than economists' forecasts, it was the fourth straight week below the key 400,000 level. Economists generally believe that weekly claims must remain consistently below that level to signal labor-market improvement. An unexpected jump in U.S. pending home sales was another focal point. The number of Americans signing contracts to buy existing homes increased in November to the highest level in 19 months, a sign of improvement for a sector that has faced a long malaise. Italy's funding costs eased even though its EUR7.02 billion bond auction failed to meet the heavily indebted government's maximum quota. The borrowing cost on Italy's March 2022 bonds was just below the key 7% level that analysts say isn't sustainable over the longer term.

European Markets

European stock markets closed higher Thursday in thin trading conditions, taking an Italian debt auction in their stride and helped by gains for Wall Street after weekly jobless claims again came in under 400,000. The Stoxx Europe 600 index ended up 0.9% at 242.46. The Italian government raised around 7 billion, against a planned range of 5 billion to 8.5 billion. It saw yields fall at the sale of three- and 10-year debt from the euro-era highs produced in a November auction. Shares of Banca Popolare dell'Emilia Romagna S C A fell 2.6% in Milan and UniCredit SpA declined 1.5%. The French CAC 40 index rose 1.8% to close at 3,127.56, carried in part by a 2.1% rise in shares of energy group Total SA. The German DAX 30 index rose 1.3% to finish at 5,848.78, helped by a 2.9% rise for drug group Bayer AG. The FTSE 100 rose 1.1% to settle at 5,566.77, supported by gains for energy stocks such as Royal Dutch Shell PLC, up 1.9%, and Petrofac Ltd., up 2.2%.

Asia Markets

Asia share markets ended mixed Thursday as concerns about Europe's debt crisis kept investors sidelined in a quiet trading session, but shares in China got a lift on speculation of policy easing measures from Beijing. Hong Kong's Hang Seng Index declined 0.7%, Japan's Nikkei Stock Average lost 0.3%, South Korea's Kospi ended steady, while the Shanghai Composite managed to shed early losses to edge up 0.2%. Japanese technology exporters were among the losers in Tokyo, weighed by the fall in the euro against the Japanese yen. Sharp lost 3.2%, while Casio Computer fell 2.7%, and Advantest gave up 1.1%. Shares of Elpida Memory dropped 5.1% after the Asahi Shimbun reported the Japanese chip-maker may seek to delay repayment of government loans. Some South Korean tech shares fared better, however, thanks to strong interest from domestic institutions. Hynix Semiconductor climbed 3.8%, while LG Display rose 3.6%.

Shares in China got some support from an editorial in the state-run China Securities Journal talking up a likely cut to banks' reserve requirement ratio in early January. Railway part builders were higher in Shanghai on hopes of government funding to improve railway infrastructure. Taiyuan Heavy Industry was up 8.0% at CNY5.68, while Jiangxi Axle added 3.1% to CNY11.06. In Hong Kong, shares of Chinese Internet major Alibaba.com closed with a 0.5% gain amid reports it had hired a U.S. political lobbying firm in preparation for a possible bid to buy Yahoo Inc. Meanwhile, commodity-linked firms extended previous-session losses across Asia. Hong Kong-listed China Coal Energy fell 1.5%, and Cnooc dropped 1%.

Commodities

Base metals closed mostly higher on the London Metal Exchange Thursday as the euro moved back into positive territory against the dollar and equity markets rose, boosted by better-than-expected economic data out of the U.S. Investor sentiment toward the growth-sensitive metals improved during afternoon trade in Europe after new figures eased concerns over the health of the world's largest economy. Initial jobless claims held below 400,000 for a fourth straight week, while the troubled housing sector showed improvement, with contracts to buy existing homes rising to the highest level in 19 months in November. A survey of Chicago-area purchasing managers came in better than expected, showing the U.S. economy continued to grow in December at about the same pace as the previous month. Base metals are sensitive to economic data and news as they are widely used in manufacturing and construction. LME three-month lead ended the session at $1,998 a metric ton, up 2% on Wednesday's PM kerb close, and up sharply from an earlier low of $1,955/ton. It was the strongest performer of the session, although zinc, nickel and tin also rose solidly.

Crude-oil futures turned higher Thursday as traders weighed support from Iran's recent threat to disrupt shipments through a key shipping channel against pressure from a pair of supply updates that showed U.S. inventories unexpectedly climbed last week. Crude for February delivery settled 29 cents higher at $99.65 a barrel on the New York Mercantile Exchange, having earlier tapped a low of $98.30. The U.S. Energy Information Administration said Thursday that U.S. oil inventories rose 3.9 million barrels in the week ended Dec. 23. Analysts, on average, expected stockpiles to have fallen 2.2 million barrels. Meanwhile, statements from the U.S. and Iran regarding the Strait of Hormuz raised tensions in the oil-producing region and helped put a floor under prices. Gold continued its slide as investors sought the flexibility of cash ahead of the end of the year. The most-actively traded gold contract, for February delivery, fell $23.20, or 1.5%, to settle at $1,540.90 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement price since July. Raw sugar futures ended higher, with trade volumes about one-third of the average this year. March delivery on ICE Futures US settled 1% higher at 23.51c/lb.