US markets

U.S. stocks finished higher for the sixth session in seven as investors positioned themselves for a major jobs report and a season of corporate earnings, shrugging off negative signals from the U.S. services sector, China and the European debt crisis. The Dow Jones Industrial Average finished with a gain of 56.15 points, or 0.45%, to 12626.02, while the Standard & Poor's 500-stock index edged up 1.34 points, or 0.1%, to 1339.22 and the Nasdaq Composite was 8.25 points, or 0.29%, higher at 2834.02. The modest gain, which put the Dow at a nearly two-month high, came after Moody's Investors Service cut Portugal's credit rating to junk status. Meantime, China's central bank lifted its benchmark deposit and lending rates by 0.25 percentage point, its third rate increase this year and its fifth rate increase in the latest round of tightening. Financial stocks stumbled in the U.S. after Portuguese and Spanish banks slumped on the Moody's downgrade of Portugal. Bank of America led the Dow's laggards, falling 2.4%. J.P. Morgan Chase fell 1.2% and Wells Fargo shed 1.1%. On the economic front, the Institute of Supply Management's purchasing manager's index for the nonmanufacturing sector declined to 53.3 in June, down from 54.6 in May and below the 54 predicted by economists. Investors will be looking ahead, however, to key readings on the labor market later this week. The data parade starts with Automatic Data Processing's jobs survey and initial weekly claims for jobless benefits Thursday and will be capped by the government's monthly employment report Friday. Second-quarter corporate earnings season is slated to begin next Monday, when Alcoa reports.

European markets

Portuguese and Italian stocks tumbled Wednesday, but losses in major European markets were more modest, in response to a downgrade of Portugal's debt rating to junk by Moody's Investors Service. The downgrade, announced after European markets closed Tuesday, continued to weigh on the euro. The downgrade disqualified the country from an index of sovereign debt, accentuating a selloff in Portuguese debt. Investors also absorbed a weaker than expected reading from the U.S. services sector and a Chinese interest-rate rise. Portugal's PSI 20 index sank 3% to end at 7126.29, with heavy losses for financial shares. Banco Comercial Portugues slumped 6.9%, Banco BPI fell 6%, and Banco Espirito Santo shed 5.7%. In Italy, the FTSE MIB stock index declined 2.4% to 19783.21. Lender UniCredit sank 7.1%, and UBI Banca dropped 6.6% on fresh investor concerns about their exposure to the European debt crisis. Spain's IBEX 35 index fell 1.2% to 10204.50. Several Spanish banks own Portuguese banks, and BBVA and Banco Popular each slumped 2.5%, while Banco Santander fell 2.1%. The pan-European Stoxx 600 index, however, lost just 0.3% to 274.79, snapping a seven-session winning streak. Mining stocks fell on news China's central bank raised its key lending rates 0.25 percentage point Eurasian Natural Resources Corp. lost 2.3%, and Kazakhmys fell 1.5%, both in London. The downgrade of Portugal reverberated among other financial stocks. Barclays fell 3.8% in London, Commerzbank dropped 3% in Frankfurt, and Societe Generale fell 2.2% in Paris. Insurer Swiss Life dropped 2.5% in Zurich. Credit Agricole slid 4.9% after the French bank said late Tuesday that its chief financial officer will step down. Among major national European benchmarks, the U.K.'s FTSE 100 index lost 0.4% to 6002.92, France's CAC-40 index fell 0.4% to 3961.34, and Germany's DAX eased 0.1% to 7431.12.

Asian markets

Asian stock markets closed in mixed territory Wednesday with China and Hong Kong dragged lower by mainland bank stocks on news Singapore's Temasek Holdings sold part of its stakes in Bank of China and China Construction Bank. But Japanese stocks rose for a seventh straight session for their best finish since the earthquake on March 11, with car makers and other exporters among the leading gainers. China's Shanghai Composite Index slid 0.2% to 2810.48, and Hong Kong's Hang Seng Index fell 1% to 22517.55, with mainland banks driving the losses in both markets. Bank of China tumbled 3.6%, and China Construction Bank shed 3.3% in Hong Kong and 1.6% and 1.2%, respectively in Shanghai. The losses rubbed off on sentiment toward other mainland banks, sending Industrial & Commercial Bank of China 2.5% lower in Hong Kong and 0.9% in Shanghai. Elsewhere, Japan's Nikkei Stock Average ended the day 1.1% higher at 10082.48, Taiwan's Taiex climbed 0.5% to 8824.44, and South Korea's Kospi gained 0.4% to 2171.19. In Tokyo, shares of Honda Motor rose 1.6% and Nissan Motor added 2.2% amid hopes that restoration of their supply-chains will boost sales. Other exporters also advanced, with Sony climbing 1.2% and Fanuc adding 1.9% in Tokyo. China's central bank raised its key lending rates 0.25 percentage point after Asian markets closed.

Base metals

Base metals closed mixed on the London Metal Exchange Wednesday amid uncertainty over the markets' short-term direction, with a stronger dollar and a rate hike in China keeping any advances in check. While nickel and tin both ended the session higher, LME three-month copper closed the afternoon's open outcry at $9,520 a metric ton, down 0.2% on the day. Crude futures settled slightly lower Wednesday, as investors paused ahead of weekly U.S. oil-inventory data and a key jobs report later this week. Light, sweet crude for August delivery settled 24 cents lower, at $96.65 a barrel on the New York Mercantile Exchange, after falling as low as $95.90 in overnight trading. Brent crude on the ICE futures exchange closed 1 cent higher, at $113.62 a barrel. Oil prices held close to flat for most of the trading session after rebounding from early lows following the decision by China to raise interest rates. Traders say they are holding off on making bets until clearer signals emerge on how the U.S. economy is faring, and whether U.S. oil supplies would continue to decline. Gold futures climbed for a second day as investors sought a safe place to park cash due to uncertainty about European debt woes and the pace of growth in China and the U.S. The most actively traded gold contract, for August delivery, settled up $16.50, or 1.1%, at $1,529.20 a troy ounce on the Comex division of the New York Mercantile Exchange. Thinly traded July delivery gold rose $16.40, or 1.1%, to $1,528.70 an ounce.