In US economic data new claims for unemployment insurance (jobless claims) fell by 11,000 to 304,000 in the latest week. Wholesale sales rose by 0.7 per cent in May, in line with forecasts, while inventories rose by 0.5 per cent.
European shares fell on Thursday on continued concerns about the health of the Portuguese banking system. Portugal's PSI share index by fell 4.2 per cent after shares and bonds of Espirito Santo Financial Group, the chief shareholder in Banco Espirito Santo, were suspended over "material difficulties" at its parent firm ESI. There were also weaker banking stocks in Norway and Spain. The FTSEurofirst 300 index fell by 1 per cent with the German Dax lower by 1.5 per cent while the UK FTSE lost 0.7 per cent. Australia's major miners also finished weaker in London trade with shares in BHP Billiton and Rio Tinto both down by 1.4 per cent.
US sharemarkets fell on Thursday but finished well off the lows. Concerns about the health of the Portuguese banking system and worries about the US profit reporting season led some investors to book profits. After being down 175 points early in the session, the Dow Jones finished trade down by 70 points or 0.4 per cent with the S&P 500 index also lower by 0.4 per cent while the Nasdaq lost 23 points or 0.5 per cent.
US treasury prices rose on Thursday (yields lower) as investors gravitated to safe-haven assets on concerns about the health of banks in Europe. US 2-year yields fell by 3 points to 0.46 per cent while US 10-year yields fell by 2 points to 2.54 per cent.
Major currencies were mixed against the US dollar in the European and US sessions on Thursday. The euro fell from highs near $US1.3650 to lows near $US1.3590, closing US trade near $US1.3605. The Australian dollar fell from highs near US94.00c to lows near US93.60c but it rebounded over the US session to end trade near US93.95c. And the Japanese yen lifted from 101.82 yen per US dollar to JPY101.05, ending US trade near JPY101.29.
World oil prices finished higher at the end of the session and off the day's lows as bargain hunters stepped in. Prices had been lower earlier in the day in response to data showing plentiful US oil supplies. Brent crude rose by US39c or 0.4 per cent to $US108.67 a barrel and the US Nymex price closed up by US64c or 0.6 per cent to $US102.93 a barrel.
Base metal prices were lower on the London Metal Exchange on Thursday with nickel leading the losses, down by 1.4 per cent, while copper bucked the trend, up by 0.5 per cent. Gold prices rose to the highest levels since March on safe-haven flows. The Comex gold futures quote rose by $US14.90 or 1.1 per cent to $US1,339.20 per ounce. Iron ore rose by US30c a tonne or 0.3 per cent to $US96.90 a tonne.
Ahead: In Australia, housing finance data is released. In the US, monthly Federal Budget figures are released. Earnings are expected from Wells Fargo during the US session.
Craig James is chief economist at CommSec