In US economic data, pending home sales fell by 3.7 per cent in December. US jobless claims fell by a larger-than-expected 43,000 to 264,000 last week -- marking the lowest result since April 2000.
European shares were mixed as the slide in energy stocks was offset by a recovery in Greek shares. Royal Dutch Shell fell by 4.3 per cent after missing profit forecasts. The STOXX 600 oil & gas index fell by 2.8 per cent. The Greek ATG index lifted by 3.2 per cent after broker comments claimed there was value in that market. The index had fallen by 9.2 per cent in the prior session. The FTSEurofirst 300 index fell by 0.1 per cent while the German Dax was up by 0.8 per cent and the UK FTSE lost 0.2 per cent. Mining shares were weaker in London with BHP Billiton down by 0.6 per cent while Rio Tinto fell by 0.3 per cent.
US sharemarkets rallied in afternoon trade on Thursday after a volatile session. Earnings seasons continued to roll on and shares in Alibaba dropped 9 per cent after missing revenue expectations. Chipmaker Qualcomm lost 11.4 per cent after trimming its 2015 outlook. At the close of trade left, the Dow Jones was up by 226 points or 1.3 per cent, the S&P 500 index was up by 1 per cent and the Nasdaq was up 45 points or 1 per cent.
US treasury prices were weaker (yields higher) on Thursday as the upbeat labour market data improved risk sentiment. US two-year yields rose by 4 points to 0.52 per cent while US 10-year yields rose by 3 points to 1.75 per cent.
Major currencies were generally weaker against the greenback in late US trade on Wednesday. The Euro was the exception, lifting from $US1.1265 to and $US1.1365 and was near $US1.1315 in afternoon US trade. The Aussie dollar eased from highs near US78.90c to lows around US77.20c and was near US77.55c in afternoon US trade. And the Japanese yen weakened from 117.60 yen per US dollar to ¥118.50 and was near ¥118.35.
World oil prices recovered from early losses on Thursday as traders digested the sharp lift in inventories. The Nymex oil price fell below $US44 a barrel for the first time since April 2009. At the close the Brent crude price was higher by US74c or 1.5 per cent to $US49.21 a barrel while the US Nymex crude price rose by US8c or 0.2 per cent to $US44.53 a barrel.
Base metal prices fell by up to 1.7 per cent on Thursday with aluminium leading the declines. Copper lost 1.6 per cent while lead gave back 1.5 per cent. Gold fell with Comex gold futures price down by $US31.30 an ounce or 2.4 per cent to $US1,254.60 per ounce. Iron ore fell by US40c or 0.6 per cent on Thursday to $US62.30 a tonne.
Ahead: In Australia, producer price data and private sector credit figures are released. In the US, the university of Michigan confidence figures are released.
Savanth Sebastian is an economist with CommSec.