MARKETS / FINANCE

Signs of strength in the labor market and manufacturing sector, as well as higher quarterly profit from FedEx, pushed U.S. stocks slightly higher on Thursday, but the mood was fragile as investors kept their eyes on Europe's festering debt crisis.

European Central Bank President Mario Draghi urged banking authorities on Thursday to ensure that tougher capital rules do not lead to a credit crunch, acknowledging for the first time that tighter regulation could hurt fragile economic growth.

U.S. jobless claims on Thursday fell to a 3-1/2-year low and a survey showed New York factories picked up speed this month, bucking gloomy economic trends set by Europe and Asia.

Industrial output declined in November for the first time in seven months as manufacturing activity slumped, countering recent signs of improvement in the economy.

The pace of decline in the euro zone private sector eased unexpectedly in December, but the global toll of the region's sovereign debt crisis became clearer on Thursday with news of falling investment and factory activity in China.

Wall Street stocks were set to rise at the open on Thursday as stronger labor market and manufacturing data lifted sentiment after three days of losses, while higher quarterly profit from FedEx also boosted equity futures.

Spain saw solid demand for its bonds on Thursday, paying more than 2 percentage points less to borrow over 5-years than Italy a day earlier as budget cuts helped ease concerns it could be among the next to fall in the euro zone's debt crisis.

New U.S. claims for unemployment benefits dropped to a 3-1/2 year low last week, a government report showed on Thursday, suggesting the labor market

A dash for cash has overwhelmed gold's traditional status as a haven from risk, putting the metal on course for its first quarterly fall since end-September 2008, when the global credit crunch was at its worst.

Seven workers injured in a rock burst at a Hecla Mining Co. silver mine in Idaho were treated at local hospitals, and operations have been halted, the company said Thursday.

China has fired a warning shot with its decision to impose tariffs on imports of sport-utility vehicles and other large cars from the United States as both countries gear up for increased trade friction next year.

For tycoon Cheng Yu-Tung, 86, listing his jewellery retailer Chow Tai Fook, the world's largest, on the Hong Kong Stock Exchange paves the way for his younger generation to strengthen its position in China's glittering market.

The decline in the euro zone's private sector eased a little this month, but a recession still looks inevitable with the region's periphery struggling badly, a key business survey showed on Thursday.

Stock index futures pointed to a higher open on Wall Street on Thursday, with futures for the S&P 500 up 0.3 percent, Dow Jones futures up 0.5 percent and Nasdaq 100 futures up 0.5 percent at 0906 GMT.

Gold prices Thursday appeared to halt the previous session's big plunge, though prospects they were carving a bottom defied the extent of damage precious metals prices suffered.

German manufacturing contracted for a third straight month in December and looked unlikely to provide a lift to Europe's largest economy soon as new orders continued to dry up, a survey showed on Thursday.

China's economic growth could be slowing further as data on Thursday showed the first year-on-year drop in foreign direct investment in 28 months and a fresh fall in new orders signaled a further contraction in factory activity.

The euro steadied just off new 11-month lows on Thursday, with eyes fixed on a Swiss National Bank meeting to consider its campaign of currency intervention while a Spanish bond auction will offer more signs on the depth of Europe's debt crisis.

Enforcement staff of the Securities and Exchange Commission may request the commissioners leading the agency that they appeal last month's rejection by a U.S. district judge of a proposed $285 million settlement with Citigroup, the Wall Street Journal said, citing people familiar with the matter.

Spot gold weakened further on Thursday after dropping 3.5 percent in the previous session, as investors remained nervous about the eurozone debt crisis amid the year-end rush to liquidate positions.

Japan's disgraced Olympus Corp said Thursday it would consider reinstating its sacked CEO, Michael Woodford, but the gesture failed to erase doubts that it would ever rehire the foreigner who blew the whistle on its crooked accounts.

Foreign direct investment growth in China fell year-on-year for the first time in 28 months, with November's $8.8 billion of commitments down 9.8 percent and hurt by a sharp drop in inflows from the United States, Commerce Ministry data showed Thursday.

Japan's disgraced Olympus Corp said on Thursday it would consider reinstating Michael Woodford, the British chief executive it sacked two months ago and who blew the whistle on a fraud that has left it weakened and in need of fresh capital.

Asian shares fell into bear market territory for the year and commodities and the euro nursed stinging losses Thursday, as fears that Europe's debt crisis is still worsening prompted investors to dump riskier assets and seek shelter in the dollar.

Business sentiment among Asia's top companies slid in the fourth quarter to its lowest in two years, with executives rattled by rising costs and fears over where the global economy is heading.

Shares in Japan's scandal-ridden Olympus Corp slumped almost 20 percent on Thursday after it corrected its accounts to reveal a dramatically weakened balance sheet, stoking talk that it might need to merge, sell assets or raise fresh capital.

China's exporters will face very severe conditions in the first quarter of 2012, the Commerce Ministry said on Thursday, with Europe's debt crisis dragging on and dampening demand.

Shares in Japan's scandal-ridden Olympus Corp slumped almost 20 percent on Thursday after it corrected its accounts to reveal a dramatically weakened balance sheet, stoking talk that it might need to merge, sell assets or raise fresh capital.

Buy the rumor, sell the EU summit.Eight times this year, European Union leaders have met to tackle their deepening sovereign debt crisis, raising hopes in financial markets that a solution could be close.