From Morrison Securities Pty. Ltd:

U.S. STOCKS

U.S. stocks declined slightly Thursday, giving back early gains as a round of disappointing economic data offset strong earnings from blue-chips and the Federal Reserve's pledge to hold down interest rates.

The Dow Jones Industrial Average surrendered early gains Thursday, falling 31 points, or 0.3%, to 12726 in recent afternoon trading. The Standard & Poor's 500-stock index fell nine points, or 0.7%, to 1317, while the Nasdaq Composite was off 15 points, or 0.5%, at 2804.

The Dow had climbed within reach of its highest intraday level since May 2008, but reversed course after data showed sales of new homes unexpectedly fell 2.2% in December; economists had anticipated an increase of 1.9%.

In addition, the Conference Board's leading economic index rose 0.4% in December, below estimates of a 0.7% rise. The data overshadowed releases earlier in the day that were seen as bullish for markets, with jobless claims coming in in line with expectations, rising 21,000 to 377,000 in the week ended Jan. 21, and orders for long-lasting goods surging 3% in December, above estimates for a rise of 2%.

The Dow was supported by Caterpillar, as the heavy-machinery maker reported its fourth-quarter earnings surged 60% on higher sales volume and an increase in new-equipment sales. Shares climbed 2.8%, making Caterpillar the Dow's strongest performer on the day.

Among other Dow components, 3M's fourth-quarter earnings rose a better-than-expected 2.8% as the consumer- and industrial-products maker posted strong growth in its industrial-and-transportation segment, but its display-and-graphics unit continued to post weaker sales. Shares rose 1.3%. Meanwhile, AT&T fell to the bottom of the Dow with a 2.2% drop after the company reported it swung to a fourth-quarter loss on several large charges, though revenue beat expectations.

EUROPEAN STOCK MARKETS
European stock markets climbed to five-month highs Thursday after the Federal Reserve said it would keep U.S. interest rates low for at least two more years. The Stoxx 600 index gained 1.1% to 257.96, snapping a two-day losing streak.

The DAX 30 index added 1.8% to 6,534.19 in Germany, while the French CAC 40 index rose 1.1% to 3,359.17 and the U.K.'s FTSE 100 index rose 1.2% to 5,792.86.

"The clear difference between today and yesterday is the Fed decision," said Steen Jakobsen, chief economist at Saxo Bank. "It's difficult to be negative in an environment where the relative gain in equities will be high compared to fixed income."

Investors further looked for progress in negotiations between Greece and its private creditors, as the parties resumed talks on a prospective debt-swap deal.

The bond holders had previously made a maximum offer of a 4% coupon, but would Thursday evening return to negotiations with a new offer of 3.75%, according to news reports.

The Greek ASE Composite Index jumped 4.4% to 769.65, outperforming the rest of the European Indexes. Italian debt was also in focus Thursday.

The government sold EUR5 billion of two-year debt in a well-received auction and lowered borrowing costs. Bank shares buoyed European stocks Thursday, with National Bank of Greece SA surging 18%, KBC Group NV and Erste Group Bank AG both up 9.5%, Raiffeisen Bank International AG up 9.1%, Credit Agricole SA adding 3.3% and Lloyds Banking Group PLC gaining 5.6%. Gains for Italian banks lifted the Italian FTSE MIB index 1.9% to 16,145.24.

Unione di Banche Italiane SCpA jumped 5.5%, Banca Monte dei Paschi di Siena SpA advanced 7.9%, Banca Popolare di Milano Scarl gained 6.9% and Banco Popolare SC rose 4.8%. Resources also supported the positive sentiment. Among miners, shares of Petropavlovsk PLC surged 12%, while Kazakhmys PLC rallied 7.8%, Rio Tinto PLC rose 4.8% and Fresnillo PLC added 3.1%.

ASIA-PACIFIC STOCK MARKETS

Hong Kong stocks jumped Thursday as investors returned from a long Lunar New Year-holiday to cheer the Federal Reserve's projection of ultra-low interest rates through late 2014.

The performance in other regional markets was less enthusiastic, however, with gains in South Korea tempered by weaker-than-expected economic growth data, while Japanese shares retreated from a near three-month high as investors locked in recent gains. Hong Kong's Hang Seng Index ended 1.6% higher at 20,439.14, completing a five-session winning streak that began ahead of the holidays.

Elsewhere, South Korea's Kospi gained 0.3% to 1,957.18, while Japan's Nikkei Stock Average fell 0.4% to 8,849.47 after a mildly positive open. Singapore's Straits Times Index was flat.

Stock gains were spread broadly in Hong Kong, with shares of trading and logistics firm Li & Fung gaining 3.5% and Aluminum Corp. of China jumping 3.3%. Property and banking names also jumped, with Sino Land climbing 4.8% and China Life Insurance advancing 4.3%.

In Japan, shares of Tokyo Electric Power surged 5.5% following reports that a government-backed fund plans to inject Y1 trillion into the owner of the earthquake-and-tsunami-hit Fukushima nuclear power plant. Shares of KDDI Corp. rose 1.1% ahead of the quarterly earnings release later in the day. Many exporters lost ground after recent advances. Shares of Elpida Memory lost 2.7%, Sony Corp. gave up 1.4%, and Canon shed 0.7%.

COMMODITIES

Copper ended 2.5% higher on the London Metal Exchange Thursday at its highest since September after news that the U.S. Federal Reserve will maintain a low-interest rate environment boosted confidence in the metal's demand prospects.

LME three-month copper ended the PM kerb at $8,590 a metric ton, up $206 on the previous close. It is the red metal's highest close since Sept. 16, when it ended at $8,696/ton. Continued declines in exchange inventories have also been supportive of prices, market participants say.

Copper stocks held in LME-listed warehouses are at their lowest level since September 2009. The industrial metals largely shrugged off weaker-than-expected home sales figures Thursday, despite their wide uses in the construction sector. Crude oil futures, which had been up 2% earlier on fresh worries about an oil supply cut by Iran, pared gains into the close Thursday. Prices had climbed after Iran said it was considering an immediate halt to crude oil exports to the European Union in response to the E.U. trade embargo set to take effect July 1.

The International Energy Agency said later it was monitoring the situation and could release strategic inventories if a supply emergency occurred. Light, sweet crude oil for March delivery on the New York Mercantile Exchange settled 30 cents higher at $99.70 a barrel. It earlier hit a one-week high of $101.39 a barrel.

Gold prices climbed to levels last seen in early December, fueled by fears of inflation and of a weaker dollar after the Federal Reserve pledged to hold U.S. interest rates near zero until the end of 2014. Gold for February delivery added $26.60, or 1.6%, to end at $1,726.70 an ounce on the Comex division of the New York Mercantile Exchange. That was gold's highest settlement since Dec. 7.