US stock markets pared session losses Thursday to arrive at a mixed finish as the halted flow of oil into the Gulf of Mexico offset poor economic data that dampened hopes for a rapid exit from recession.

The Dow Jones Industrial Average of 30 blue chip stocks fell 7.41 points (0.07 percent) to 10,359.31, recovering from more than 100 points down minutes before the closing bell.

Still, the Dow closing in negative territory ended a seven-session winning streak. The tech heavy Nasdaq composite index dipped 0.76 point (0.03 percent) to 2,249.08 while the broad market S&P 500 index slipped 1.31 points (0.12 percent) to a provisional close of 1,096.48.

Stocks rallied in the final hour of trading on news that BP said it had stopped oil flowing into the Gulf of Mexico for the first time since April as they shut all valves on a new cap placed on top of a fractured wellhead.

In New York trade, BP shares finished the day up 7.57 percent, with much of the gains coming in the last 30 minutes of trading.

Financials recovered ground after the passage of a sweeping financial overhaul bill and buoyed by speculation of a potential settlement between Goldman Sachs and the Securities and Exchange Commission.

Investors were earlier worried by news that manufacturing had slumped in New York and industrial production across the country rose only modestly last month.

The data overshadowed news that JPMorgan Chase saw a net profit of 4.8 billion dollars in the second quarter, up nearly 80 percent from the same period last year, as well as a drop in new weekly claims for jobless insurance benefits.

European Market

European stocks finished modestly lower Thursday as downbeat economic news from the U.S. raised concern about the pace of the recovery, offsetting strong earnings from J.P. Morgan Chase & Co. and receding fears about the euro zone crisis.

Market participants retreated from equities after the U.S.

Federal Reserve Bank of Philadelphia's business index dropped sharply, adding to unease over weak data released earlier. U.S. producer prices fell for a third straight month in June as the cost of food and energy declined.

Manufacturing activity in the New York area expanded more slowly than expected in July, according to a survey from the Federal Reserve Bank of New York.

Adding to the downbeat mood, China reported that second quarter gross domestic product grew 10.3% from a year earlier, slowing from the 11.9% annual growth recorded in the first quarter.

The data kept investors cautious as they awaited results from major U.S. companies such as Google, Citigroup and Bank of America, all slated to report this week.

The pan European Stoxx 600 index closed down 1.2% at 252.97. The U.K.'s FTSE 100 index fell 0.8% to 5211.29, and France's CAC-40 index ended down 1.4% at 3581.82. Germany's DAX fell 1% to 6149.36, breaking a seven-session winning streak.

As worries grew about the pace of the U.S. recovery, concerns over the euro zone sovereign debt crisis continued to ease.

A successful debt sale by Spain helped the euro rise above $1.28, a sharp bounce from the level of $1.1876, a more than four-year low, it hit in early June.

The Spanish Treasury sold $3.8 billion of a 15 year government bond, the maximum it had intended. A French auction, held after Spain's, was also well received.

Also on a brighter note, second quarter earnings from J.P. Morgan Chase came in better than expected. U.S. weekly claims for unemployment benefits fell 29,000 to their lowest level since August 2008, though claims lasting more than one week jumped. Still, banking stocks retreated as the U.S. Senate planned to vote on the sweeping financial overhaul bill.

A final vote would help to end months of uncertainty over how the new rules will affect the industry.

Investors are now braced for growth by financial companies to slow as new regulations kick in. Shares in Barclays fell 4.2% in London, while Royal Bank of Scotland slid 2.2%. In Paris, BNP Paribas dropped 4% and Credit Agricole lost 3.3%.

In major market action: Greece's fourth largest lender by assets, Piraeus Bank, said it will offer EUR701 million to acquire controlling stakes in two Greek government controlled banks, in what is seen as the first in a possible wave of mergers in the Greek banking sector.

Piraeus Bank ended up 13%, while Hellenic Postbank shares jumped 22% and ATEBank ended 6.5% higher. The proposal comes as the government has been increasingly keen to promote consolidation in the sector amid concerns about the medium term health of the Greek banking sector.

Analysts generally welcomed the move saying that it would boost Piraeus Bank and may touch off a wave of other mergers in the industry.

Commodity stocks fell as doubts mounted about the outlook for demand. Rio Tinto slipped 3.3%, and BHP Billiton fell 1.2%. Kazakhmys fell 1.9%.

Asian Market

Asian markets ended mostly lower Thursday, with Chinese bank stocks falling on a poor debut for Agricultural Bank of China's Shanghai listed shares. Resource stocks broadly declined on concerns slower than expected Chinese economic growth might dampen commodities demand.

Japan's Nikkei Stock Average fell 1.1%, Australia's S&P/ASX 200 gave up 0.4%, South Korea's Kospi lost 0.4% and India's Sensex was 0.2% lower in afternoon trade.

Taiwan's Taiex slipped 0.1%, while a sharp fall in Chinese banking shares dragged down Hong Kong's Hang Seng Index 1.5% and China's Shanghai Composite Index by 1.9%. Dow Jones Industrial Average futures were seven points higher in screen trade.

Agricultural Bank of China rose only marginally on its highly anticipated debut in Shanghai, finishing at CNY2.70 compared with its initial public offering at CNY2.68.

The stock's lackluster debut cast doubt over the rural lender's ability to exercise the green shoe option on its initial public offering to claim the record for the biggest listing.

Among major banks, shares of Industrial & Commercial Bank of China dropped 1.6% and China Construction Bank gave up 2.1% in Shanghai; in Hong Kong, the stocks fell 2.4% and 2.2%, respectively. Mixed reaction emerged to China's latest economic data.

The nation's gross domestic product rose 10.3% on year in the second quarter, from the first quarter's 11.9% growth rate, and undershot market expectations centered on a 10.5% increase.

The country's consumer price index rose 2.9% in June, easing from May's 3.1% rise and well below economists' expectations of a 3.3% increase.

Resource stocks generally declined after the release of the Chinese data. Cnooc dropped 2.5% and Aluminum Corp. of China gave up 1.8% in Hong Kong, Inpex Corp. lost 5.1% in Tokyo and Rio Tinto slid 1.1% in Sydney. Shares of Nufarm slumped 28% in Sydney after the company warned late Wednesday that its fiscal 2010 profit would be 50% below its previous guidance.

On Thursday it said it won't meet a banking covenant on the ratio of earnings to net interest for the year ending July 31.

Australian toll road operator Intoll Group bucked the market, rocketing 30% after saying it received a $3.47 billion conditional takeover proposal from Canada Pension Plan Investment Board.

Tokyo shares fell on profit taking following Wednesday's 2.7% rise. Exporters were under pressure from the yen's earlier gains against the U.S. dollar and the euro on Wednesday.

Kyocera Corp was down 1.2% and Fanuc slid 0.9%. Euro sensitive shares were down, with Canon off 2.5% and Sony Corp. losing 2.4%.

Commodities

Base metals on the London Metal Exchange ended mixed again Thursday, with analysts predicting no aggressive moves in either direction for the time being.

The complex showed little reaction to a larger than expected decline in jobless claims, a third straight monthly drop in producer prices and strong J.P. Morgan Chase quarterly earnings.

The euro rallied 1.4% throughout the course of the day, hitting highs of $1.2917.

Swiss commodity supplier Glencore International SA and Credit Suisse Group said they were looking at setting up an ETF just under a year ago.

The product, which is still sitting with the regulator, would see the merchant, Glencore, buy aluminum as physical backing for the fund with Credit Suisse as the sole clearer. Copper came off early lows of around $6,611/ton to hit an intraday high of $6,723.50/ton, before sliding lower again.

The metal finished down $45, at $6,679/ton. After trading in a relatively narrow range between $1,830/ton and $1,852/ton for much of the day, LME zinc lost ground late in the afternoon to finish $40 lower.

But Standard Bank analyst Leon Westgate said open interest is still relatively high, with the potential for further short covering activity should prices gain some upwards momentum and break through resistance around $1,900/ton.

Crude oil futures ended lower on Thursday after fresh signs of a slowdown in the U.S. and as stocks fell, while natural gas futures soared 6.5%, their biggest one day rise since December.

Natural gas prices bucked the trend thanks to a government inventories report that showed an increase in stockpiles, but one on the lower end of expectations. Crude oil for August delivery lost 42 cents, or 0.6%, to $76.62 a barrel.

Gold futures ended with small gains, but were largely unchanged as a set of mixed U.S. and Chinese indicators clouded an already hazy economic picture.

The most actively traded contract, for August delivery, settled up $1.30, at $1,208.30 an ounce on the Comex division of the New York Mercantile Exchange.

Provided by Morrison Securities