US Markets

U.S. stocks were mostly lower Thursday in volatile trading, as a toxic mix of weak economic data and a surprise oil-market intervention competed for investors' attention with reports of a new Greek austerity plan.

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The Dow Jones Industrial Average fell 59.67 points, or 0.49%, to 12050, after plunging nearly 235 points at one point in the session. The Standard & Poor's 500-stock index slid 3.64 points, or 0.28%, to 1283.50. The Nasdaq Composite gained 17.56 points, or 0.66%, to 2686.75, on the back of an afternoon surge that followed the Greek austerity reports.

The late-day moves spared the stock market of what, mid-session, was shaping up to be a sizeable rout. Investors had no shortage of negative headlines a day after the Federal Reserve downgraded its assessment of the U.S. economy. Shares of energy companies followed the price of oil sharply lower after the International Energy Agency said members would release 60 million barrels from emergency supplies to replace lost Libyan oil exports.

Energy stocks were hit hard by the surprise IEA intervention. Energy led the S&P 500 lower while Exxon Mobil was one of the blue-chip Dow's worst performers, falling 1.38, or 1.7%, to 78.44, as was Chevron, which shed 1.71, or 1.7%, to 99.36. Even though lower oil prices are a positive for consumers, market participants said the commodity's plunge to near $91 a barrel required more big investors to dump riskier assets in order to cover their surprise losses.

Investors were also discouraged after weekly initial jobless claims disappointed economists' expectations, pointing to persistent weakness in U.S. employment. Late in the session, stocks rocketed off their lows amid reports that Greece had reached a breakthrough on a five year austerity plan with European Union and International Monetary Fund officials.

Investors have lately welcomed any and all positive news on the Greek-debt conundrum. Airline stocks were sliding oil's chief stock-market beneficiaries. American Airlines parent AMR Corp. gained 30 cents, or 5.2%, to 6.05, while United Continental Holdings added 1.16, or 4.8%, to 25.14 and Delta Airlines rose 35 cents, or 3.7%, to 9.94.

Europea Markets

European stocks slumped and the euro weakened as a downbeat outlook for the U.S. economy weighed heavily, intervention in oil markets surprised and disappointing economic data from around the world spurred investors to seek safe harbors.

The Stoxx Europe 600 index shed 1.4% to 264.31, having touched 263.71, the lowest point since March. Figures from China showed manufacturing activity fell to the slowest rate of expansion in 11 months, while private-sector growth across the bloc of 17 euro-zone nations was the weakest since September 2009, and U.S. initial jobless claims were higher than expected.

Worries about sovereign debt on the continent remain at the forefront of investors' minds ahead of a meeting of European Union leaders in Brussels. Markets are likely to remain on edge until a Parliament vote in Athens next week on further austerity measures, said Joshua Raymond, strategist at City Index.

The Greek ASE Composite index fell 2.3%. And members of the International Energy Agency said they would release 60 million barrels of oil to ease prices, which sent the price of Nymex crude to below $90 a barrel. Cyclical stocks or those sensitive to economic events, political risks and the business cycle were battered most.

The Stoxx Europe 600 banks index fell 2.6% as investors continued to fret over lenders' exposure to Greece's sovereign debt problems. Also, the president of the European Central Bank warned that instability risks in the European banking system were extremely high. In Madrid, Banco Santander sank 4.8% and BBVA fell 5.5% in Madrid, as the IBEX 35 index sank 2.8% t0 9942.60. UniCredit tumbled 4.9% in Milan as the FTSE MIB index fell 2.7% to 19468.31.

The Stoxx Europe 600 basic resources index shed 2.1% on concerns about demand for oil in a tepid global economy. The Chinese data also pressed on mining stocks. Vedanta Resources slumped nearly 7% and Glencore International sank 4.8%, helping pull the U.K.'s FTSE 100 index down 1.7% to 5674.38.

The IEA announcement hit oil stocks. Royal Dutch Shell and BP both fell 2.2%. In Frankfurt, the DAX fell 1.8% to 7149.44. Drug and chemicals concern Bayer sank 6.3% after Pfizer and Bristol-Myers Squibb reported a successful trial of their Eliquis blood thinner. Bayer is developing a blood thinner with Johnson & Johnson.

In Paris, the CAC-40 shed 2.2% to 3787.79. Chip maker STMicroelectronics NV fell 5.5%. ST-Ericsson, the company's joint venture with L.M. Ericsson, said reduced demand from some customers means it will take the joint venture longer to reach profitability. Ericsson fell 1.7%. French banks fell, with BNP Paribas down 3.9% and Credit Agricole down 3.8%.

Asian Markets

Asia's major stock markets ended mostly lower Thursday, with concerns over the U.S. economy back in focus after a cautious outlook from Federal Reserve Chairman Ben Bernanke. The Nikkei Stock Average ended the session down 0.3% at 9596.74, South Korea's Kospi fell 0.4% to 2055.86, and Hong Kong's Hang Seng Index lost 0.5% to end at 21759.14, despite breaching positive ground for part of the afternoon session.

The Shanghai Composite Index defied the regional trend, however, rallying 1.5% to 2688.25. In Tokyo, some export-focused tech shares were under pressure in the wake of the Bernanke comments, with Elpida Memory off 2.2% and Toshiba falling 2.5%. Nintendo dropped 3.8%, and Renesas Electronics gave up 1.1%. Hong Kong-listed bank shares were likewise mostly lower, with HSBC Holdings down 0.9%, Industrial & Commercial Bank of China losing 1.2%, and China Construction Bank falling 2.3%.

Among the Hong Kong gainers, Henderson Land Development jumped 2.6% in the wake of recent share purchases by its chairman, Lee Shau Kee. On the data front, HSBC released a preliminary reading of its gauge of Chinese manufacturing activity, which fell to an 11-month low of 50.1 in June, compared with 51.6 in May. With slowing growth making tighter monetary policy in China less urgent, some interest-rate-sensitive stocks rose sharply in Shanghai. Property major China Vanke gained 0.5%, while Bank of China ended 2.3% higher, even as its Hong Kong shares fell 1.1%.

Base Metals

Copper on the London Metal Exchange closed below $9,000 a metric ton for the first time in almost two weeks Thursday as a strong dollar and global growth concerns triggered heavy selling across the metal markets. Disappointing figures on private-sector activity in the euro zone, manufacturing in China and jobless claims in the U.S. all contributed to the risk-off tone, which drove investors out of the commodity markets and into the perceived refuge of the greenback.

Key to the slump in sentiment was a speech by U.S. Federal Reserve Chairman Ben Bernanke, who late Wednesday voiced concern about the pace of U.S. economic growth but said the odds of the central bank embarking on another round of dollar-diluting quantitative easing remain low. LME three-month copper closed down 0.6% at $8,955 a metric ton. It is the first close below the psychological $9,000/ton mark for the metal since June 13.

Three-month aluminum, the best performing metal of the year to date, meanwhile suffered the most severe losses--closing down 1.6% at $2,508/ton. Oil futures plunged Thursday after the International Energy Agency announced its members would release 60 million barrels from strategic reserves in an effort to ease prices. Oil prices fell as low as $89.69 a barrel, their lowest level since Feb. 22. Light, sweet crude for August delivery on the New York Mercantile Exchange settled down $4.39, or 4.6%, at $91.02 a barrel on the New York Mercantile Exchange.

Brent crude on the ICE futures exchange fell even further, settling down $6.95, or 6.1%, to $107.26 a barrel. In a surprise move, the IEA, which represents most of the world's largest energy consumers, said its members would release 2 million barrels of oil per day for 30 days to offset the effects of the supply disruption caused by the civil war in Libya.

The U.S. said it will contribute half of that amount. Gold tumbled after the news of the surprise release of strategic crude oil reserves intensified investor expectations of lower inflation amid slower economic growth. A strong dollar, which rallied against the euro as concerns about inflation eased, also pressured gold prices. Gold for August delivery, the most actively traded contract, settled down $32.90, or 2.1%, at $1,520.50 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract snapped a seven-day winning streak and hit an intra-day low of $1,515.00. Thinly traded June-delivery gold ended down $32.80, or 2.1%, at $1,520.10 a troy ounce.

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