In US economic data, the Philadelphia Fed business activity index fell from 22.5 to 20.7 in October. Across the sub-indices, new orders and prices paid lifted, while employment eased. The NAHB Housing market index fell from 59 to 54 in October -- the first decline in five months, suggesting moderation in the pace of new construction. US industrial production rose by 1 per cent in September, well above forecasts. Strength in mining and utilities drove the result. US jobless claims fell 23,000 to 264,000 last week.
St Louis Fed President Bullard (hawkish) said the Fed may want to continue its bond buying stimulus for now given the drop in inflation expectations. Bullard argued that tapering was always going to be data-dependant and he still expected a rate hike in the March quarter 2015.
European shares recovered on Thursday after hitting a 13-month low earlier in the session. Concerns about global growth continued to dominate sentiment. The relative strength index fell to 19.6, a three year low, suggesting the market was oversold and supported bargain hunting late in the session. The STOXX Euro zone banking index fell 2.1 per cent with the insurance sector down 1.3 per cent. The FTSEurofirst 300 index lost 0.5 per cent after initially falling 2.9 per cent. The UK FTSE lost 0.3 per cent and the German Dax gained 0.1 per cent. And Australia's major miners lifted in London trade with shares in BHP Billiton up 0.6 per cent while Rio Tinto gained 0.3 per cent.
US sharemarkets were mixed in choppy trade on Thursday. The better economic data helped to ease fears about the impact of a weakening global economy on US growth. Energy stocks rebounded after the recent selloff. The S&P 500 energy sector rose 1.7 per cent. The Dow Jones closed down 25 points or 0.2 per cent with the S&P 500 index flat while the Nasdaq rose 2 points or 0.1 per cent.
US treasury prices eased on Thursday (yields higher) as traders locked in profits after the prior sessions rally. US two-year yields rose by 2 points to 0.34 per cent while US 10-year yields were up 3 points to 2.17 per cent.
Major currencies were mixed against the greenback over the European and US session on Thursday. The Euro rose from lows near $US1.2705 to highs near $US1.2835, ending US trade near $US1.2795. The Aussie dollar fell from highs near US87.95c to lows around US86.95c, ending the US session near US87.55c. And the Japanese yen held between ¥106.40 per US dollar to ¥105.50, ending US trade near ¥106.35.
World oil prices rose modestly on Thursday. Brent crude rose by US71c or 0.8 per cent to $US84.49 a barrel while the US Nymex crude price rose by US92c or 1.1 per cent to $US82.70 a barrel.
Base metal prices were substantially weaker on Thursday with Zinc (down 2.6 per cent), followed by nickel (down 2.3 per cent). Other metals lost between 0.2 per cent-1.8 per cent. Gold fell with the Comex gold futures quote down by $US3.60 an ounce or 0.3 per cent to $US1,241.20 per ounce. Iron ore fell by $US1.70 to close at $US80.50 a tonne.
Ahead: In Australia, no economic data is released. In the US housing starts, building permits and consumer confidence are released.