In US economic data, jobless claims rose 11,000 to 315,000. The treasury monthly budget statement showed a $US129 billion deficit in August, in line with estimates.
European shares closed near a one-week low on Thursday after the disappointing US employment data. Mining stocks were hit with concerns about China's economic growth following with the weaker Chinese inflation data. The STOXX Europe 600 Basic Resources index fell 0.3 per cent. Confirmation the EU will impose new sanctions against Russia and the likely impact on the eurozone economy also weighed on stocks. The FTSEurofirst 300 index ended 0.1 per cent lower with the German Dax also down 0.1 per cent while the UK FTSE lost 0.5 per cent. Australia's major miners were weaker in London trade with shares in BHP Billiton down 0.7 per cent while Rio Tinto fell 0.3 per cent.
US sharemarkets were mixed on Thursday, as the weaker jobless claims data weighed on markets. A lift in financial stocks helped to limit the losses. JP Morgan rose 0.5 per cent while Bank of America gained 1.2 per cent. Small and mid-cap stocks outperformed with the S&P MidCap 400 index lifting 0.4 per cent and the S&P SmallCap 600 index up 0.7 per cent. At the close the Dow Jones index was down almost 20 points or 0.1 per cent. The broader S&P 500 index rose 0.1 per cent while the Nasdaq rose five points or 0.1 per cent.
US treasury prices rose for the first time in four days (yields lower) as news of sustained US military involvement in Iraq and Syria as well as new sanctions on Russia drove safe haven demand. US two-year yields fell one point to 0.56 per cent while US 10-year yields were flat at 2.55 per cent.
Major currencies were mixed against the US dollar over the European and US sessions on Thursday. The euro rose from lows near $US1.2895 to about $US1.2950 settling at $US1.2920 at the end of the US session. The Aussie dollar fell from highs near US91.80c to lows near US90.85c before ending the US session near US90.95c. And the Japanese yen held between ¥106.65 per US dollar and ¥107.20, ending US trade near ¥107.10.
World oil prices recovered after initial weakness on Thursday. Traders weighed up the recent cuts to OPEC demand forecasts against an escalation of the conflict in the Middle East. Brent crude hit a two-year low intraday before recovering to close up US25c or 0.3 per cent to US$98.29 a barrel with the US Nymex price ending $US1.16 a barrel higher at $US92.83 a barrel.
Base metal prices were mostly weaker on Thursday, with the exception of lead (up 0.3 per cent) and tin (up 0.4 per cent). Zinc (down 1.9 per cent) and nickel (down 1.7 per cent) were the biggest decliners while copper fell to a near three-month low on Chinese growth concerns. Gold prices fell on Thursday with the Comex gold futures quote down $US6.30 an ounce or 0.5 per cent to $US1,239 per ounce. The iron ore price fell US30c or 0.4 per cent to $US81.90 a tonne.
Ahead: In Australia, credit card and lending finance figures are released. In the US, retail sales and business inventories are released.
Savanth Sebastian is an economist with Commsec