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Wall Street lost ground Thursday ahead of the release of the November jobs report on Friday. New unemployment claims dropped from 466,000 the previous week to 457,000 last week, or its lowest level in 15 months. Forecasts were for a rise to 480,000.  

Meanwhile on Thursday, Ben Bernanke faced the Senate Banking Committee in a confirmation hearing for a further four-year term as Federal Chairman.

Bernanke is expected to be re-confirmed, however he faced heavy criticism and arguments were made in relation to the banks powers being reduced.

In consumer news, overall retail sales increased 0.5% in November according to reports, well down on an expected 2.1% rise. 

The Dow Jones shed 86.53 points, or 0.83%, to 10,366.15, the S&P 500 weakened 9.32 points, or 0.84%, to 1,099.92 and the NASDAQ lost 11.89 points, or 0.54%, to 2,173.14. 

Financials closed lower. Wells Fargo dropped 3.5%, while Goldman Sachs, JPMorgan and Citigroup were between 1.2% and 1.4% below the line.

Bank of America added 0.7% after announcing it would repay US$45 billion in TARP payments to the US government.

Principal Financial Group sank 13.3% after warning of a weaker than expected outlook.

Comcast jumped 6.5% after the cable operator agreed to acquire a 51% stake in NBC Universal from General Electric in a deal that creates a new entertainment company worth $37.25 billion. GE shares dipped 0.4%.

Retailers Nordstrom and Limited Brands gained 0.7% and 2.1% after reporting increased sales of 2.2% and 3% in November respectively.

However, a 17% drop in same-store sales versus a year earlier saw Abercrombie & Fitch shares slump 9.3%.  

Energy stocks tracked the price of crude lower. Exxon Mobil, Chevron and ConocoPhillips lost 1.1%, 1% and 1.3% respectively.

NYMEX light crude oil for January delivery fell US14c to settle at US$76.46 a barrel.

COMEX gold for February delivery rose US$5.30 to settle at a new record of US$1,218.30 an ounce.

European Markets

Data showing a contraction in the US service sector saw European shares close mainly lower. Resource stocks tracked metals prices lower.

The UK benchmark FTSE 100 lost 14.39 points, or 0.27% to 5,313.00. The French CAC40 added 3.19 points, or 0.08% to 3,799.11, while the German DAX shed 11.33 points, or 0.20% to 5,770.35.

Xstrata led the miners lower with a fall of 3.8%, while Rio Tinto weakened 3.3%.

Anglo American and Antofagasta fell 2.6% and 1.6% as BHP Billiton slid 0.5%.

Banks rallied on the back of Bank of America’s announcement. Royal Bank of Scotland, Lloyds and Barclays put on 4.7%, 4.4% and 2.4% respectively.

Commerzbank and Societe Generale added 1.5% each, while BNP Paribas bucked the trend to be 0.6% lower.

AXA gained 1.1% as speculation surfaced the insurer could launch a takeover bid for Irish Life & Permanent.

Peugeot lost 2.7% after the automaker revealed the possibility of buying a stake in Mitsubishi Motors. Renault and Volkswagen advanced 1.5% and 1.3%.

Siemens dropped 5.2% after the German industrial conglomerate took a large fourth quarter writedown on its JV with Nokia and warned of lower operating profits in 2010.

Japanese Markets

The Nikkei added its biggest one-day gain in seven months, hitting five-week highs. Mitsubishi led the way with a 13% rally on news Peugeot Citreon might buy a stake in the automaker, while exporters joined the party on a weakening yen.

The Nikkei 225 surged 368.73, or 3.84% to 9,977.67.

Among the banks, a relatively subdued sector of the market, Mitsubishi UFJ put on 2.3%, while Sumitomo Mitsui Financial Group rallied 2.8%.

Japan’s number three bank Mizuho closed 1.2% higher.

Among other automakers, Honda added more than 4%. Larger rival Toyota climbed 5.6%.

Meanwhile, for consumer stocks Canon jumped 5.4%, while Sony was up 6% as the yen weakened.

Sharp put on more than 4% following an upgrade to the stock from UBS.

Japan Tobacco was the third biggest gainer on news the Japanese government would raise taxes less than expected on the drug.

Hong Kong Markets

Hong Kong stocks rose for the fourth consecutive day as market sentiment continued to improve globally. Banks and property stocks led the rally.

The Hang Seng put on 264.30, or 1.19% to 22,553.87.

ICBC gained 1.2% on reports the bank is in talks to buy a 20% stake in Taiwan's Cathay Financial. The news spurred reports of further acquisitions in the sector.

Bank of China and China Construction Bank rose 2% and 0.8%.

Shimao Property and R&F Properties jumped 6.2% and 5.3%, while China Overseas Land put on 2.9%. Expected stronger earnings boosted the sector.

Henderson Land climbed 6% after the company said it expected to sell a large amount of property next year.

Zhaojin Mining and Sino Gold gained 1.3% and 0.8% as the price of gold reached record highs. The former also said it would bid for Zhaoyuan Canzhuang Gold mine. 

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