U.S. stocks cut losses substantially on Thursday, with Dow industrials actually moving into the black after encouraging new home sales data, which worked against fears of the Fed potentially easing its bond buying program in the near term and weak Chinese manufacturing data.
As of around late afternoon within an hour to market close, the Dow was still in positive territory, lately up 12 points at 15,319, while the Nasdaq fell 2 points at 3,461, and the S&P 500 edged down 3 points to 1,652.
On Wednesday, stocks swung wildly, first rising sharply and then falling on mixed signals from Federal Reserve chairman Ben Bernanke on the potential tapering of the central bank's monetary policy, who suggested the slowing could come in the "next few meetings".
The Fed concerns, along with the China data, which saw the HSBC flash version of the PMI index for May fall to a seven month low of 49.6, weighed on Asian equities and and stocks around the globe. The Nikkei Stock Average (TYO:JP:NIK) closed down 7.3%, its worst single-day loss since March 2011.
On a more positive note, in U.S. economic data, U.S. weekly jobless claims dropped by more than expected, by 23,000 to 340,000 for the week that ended May 18. Economists expected jobless claims to fall to 343,000.
Sales of new U.S. homes rose in April to a seasonally adjusted annual rate of 454,000, topping views of 430,000. The Federal Housing Finance Agency's home-price report for March also came in, saying U.S. home prices rose a seasonally adjusted 1.3% in March.
Meanwhile, Markit said its flash manufacturing purchasing managers index for May slipped fractionally to 51.9 - the lowest reading since October. A plus for the May flash report is strength in new orders, which were up 1.3 points to 52.8, pointing to a rising rate of monthly growth. Other readings were mixed with backlog orders steady, inventories moving lower, price pressures rising slightly, and hiring slowing.
In corporate news, shares of Hewlett-Packard (NYSE:HPQ) jumped more than 16% Thursday, as despite reporting a sharp decline in profit, its second quarter results and outlook topped market views.
Ralph Lauren (NYSE:RL) shares dropped more than 2.4% after the company's quarter profit topped views, but sales fell short of estimates.
Gold futures for delivery in June climbed $24.40, or 1.8%, to settle at $1,391.80 an ounce on the Comex division of the New York Mercantile Exchange - its highest level in a week as investors flocked to the metal's safe haven appeal.
After some volatile trading, oil futures ended almost unchanged on Thursday as better-than-expected new home sales data in the U.S. offset demand concerns from the weak China data. July crude fell 3 cents to settle at $94.25 a barrel on the New York Mercantile Exchange.
European markets finished sharply lower today with shares in France leading the region. The CAC 40 was down 2.10% while Britain's FTSE 100 was off 2.10% and Germany's DAX fell lower by 2.10%.