FROM MORRISON SECURITIES PTY. LTD:
U.S. STOCK MARKETS
The Dow industrials slid, capping their biggest monthly decline in two years, after downbeat readings on the labor market and business activity. The Dow Jones Industrial Average fell 26.41 points, or 0.2%, to 12393.45.
Data from the U.S., Western Europe and China, the world's second-biggest economy, painted a uniformly grim picture for investors in risky assets like copper, crude oil or equities.
Stocks turned red minutes before the close Thursday in a choppy session that saw the Dow move 173.39 points from low to high. The blue-chip benchmark fell 6.2% for the month, its biggest monthly fall since a 7.9% drop in May 2010.
The Standard & Poor's 500-stock index dropped 2.99 points, or 0.2%, to 1310.33. Energy and tech stocks led the declines. The Nasdaq Composite fell 10.02 points, or 0.4%, to 2827.34.
The U.S. economy added fewer-than-expected private-sector jobs in May, according to a report by Automatic Data Processing and consultant Macroeconomic Advisers.
Also, the number of U.S. workers filing new applications for unemployment benefits rose more than expected last week, the Labor Department reported.
Meanwhile, a reading on manufacturing activity in the Chicago region fell more than economists expected, to the lowest level since September 2009.
On Thursday, the Commerce Department lowered its estimate for first-quarter U.S. economic growth to 1.9% from 2.2%, in line with economists' expectation that the U.S. economy slowed more than initially thought during the period.
The price index for personal consumption increased 2.4%, as previously estimated. The downbeat data come on the eve of the government's employment report Friday, which has fallen short of expectations the last two months.
The International Monetary Fund has started discussing contingency plans for a rescue loan to Spain in the event the country fails to find the funds needed to bail out Bankia, Dow Jones Newswires reported, citing people familiar with the matter. The report eased concerns about the fallout from troubles at Spain's third-largest bank by assets, fueling a midday recovery in U.S. stocks.
Spain's economy minister later dismissed rumors that Madrid was discussing a rescue loan program with the IMF as senseless.
EUROPEAN STOCK MARKETS
In Europe, Germany's jobless rate fell to 6.7% in May, the lowest level since comparable records began in 1998, and better than economists' prediction for a 6.8% rate.
Meanwhile, German retail sales rose more than expected in April. In addition, the inflation rate for the euro zone slowed to 2.4% in May from 2.6% in April, compared with expectations of 2.5%.
Slowing inflation gave hope that the European Central Bank would be more willing to provide additional stimulus measures. Joy Global skidded 5.1% as the mining-equipment maker lowered its full-year projections on a slowing international market. Ciena rallied 14% after the network gear maker reported a fiscal second-quarter adjusted profit, compared with analyst expectations of a slight loss, and revenue that topped forecasts. F5 Networks slid 3.8% after its sales chief resigned. Facebook rose 5%.
European stock markets ended May with the biggest monthly loss since August 2011, after jobs and business data from the U.S. Thursday fell short of expectations, stoking concerns about upcoming nonfarm payrolls numbers.
The Stoxx Europe 600 index dropped 0.5% to 239.29, after trading as high as 242.18 earlier in the session. For the month, the index lost 7%. Logica PLC jumped the most in the pan-European index, up 69% after CGI Group Inc. said it would buy the U.K. IT-services group for GBP1.7 billion ($2.6 billion).
European markets came off session highs and turned negative after weekly jobless claims in the U.S. unexpectedly jumped 10,000 last week to 383,000, the highest level in five weeks.
In Europe, the latest problems in the banking sector have prompted European Union leaders to search for solutions to prevent similar crises in the future. The European Commission called Wednesday for the creation of a banking union, which was Thursday backed by European Central Bank President Mario Draghi.
The Commission also suggested using the European Stability Mechanism to bail out failing banks, a move that supported markets in the prior day's trade.
Spain's IBEX 35 index was marginally lower at 6,089.80, but ended the month with a 13.1% loss, making it the worst month since November 2010.
Bankinter SA fell 6.1% but heavyweight telecom Telefonica SA bucked the trend, adding 1% after it said late Wednesday it is considering listing its German unit and some of its Latin American businesses as a strategy to curb debt.
In France, the CAC 40 index struggled for direction for most of the session, but closed 0.5% higher at 3,017.01. For the month, it lost 6.1%. Car makers weighed on the index, with Peugeot SA off 2.9% and Renault SA 2.1% lower.
Auto firms also fell in Germany. BMW AG shed 1.5%, Daimler AG declined 1.4% and Volkswagen AG lost 1.1%%. The DAX 30 index closed 0.3% lower at 6,264.38, leaving it down 7.3% for the month. In the U.K., miners weighed on the FTSE 100 index as most metals prices headed lower.
Antofagasta PLC shed 1.5% and Evraz PLC fell 3.1%. The index, however, inched 0.2% higher to 5,306.95, as GlaxoSmithKline PLC added 2.1%. For the month, the index lost 7.5%, the worst month since February 2009.
ASIA-PACIFIC STOCK MARKETS
Asian markets finished the month bruised after concerns over the health of the Spanish banking system pushed stocks down across the region Thursday, with Australia and Japan recording their worst month in two years.
Investors rushed to safety in Asia as concerns grew over the health of the Spanish banking system, which briefly pushed Hong Kong's Hang Seng Index into negative territory for 2012, before markets trimmed their loses as the day progressed.
Japan's Nikkei fell 1.1% to 8542.73 and was down 10.3% for May, bringing to an end its worst month since May 2010. Asia's worst performer for the month was the Hang Seng Index, which dropped 11.7% to 18629.52 and was down 0.3% on the day.
Hounded by short sellers, the benchmark fell in 16 of the month's 22 trading sessions. In percentage terms, it was the Hang Seng's worst month since September 2011 and its worst May since 1998.
South Korea's Kospi closed 7% lower on the month and flat on the day at 1843.47, climbing rapidly at the end of the session as foreign funds swooped in to buy local blue chips such as Samsung Electronics and Hyundai Motor. It was the South Korean index's worst month since August 2011.
Japanese exporters were pressured by a higher yen, especially against the euro. Exporters such as electronics company Ricoh and carmaker Honda Motor underperformed, falling 4.2% and 2.4% respectively.
Construction equipment manufacturer Komatsu fell 2.6% and Hitachi Construction Machinery fell 2%. Leading the losses in Chinese shares were infrastructure-related firms.
Hong Kong companies with significant exposure to global growth took a beating with sourcing firm Li & Fung slumping 5.9%, making it the worst percentage loser among 48 blue chips. Companies geared to China's domestic consumption didn't fare well either. Mobile telecom operator China Unicom closed down 1.6% while footwear retailer Belle dropped 2.0%.
Base metals closed mostly lower on the London Metal Exchange Thursday, with early gains erased after a batch of poor U.S. data derailed risk sentiment.
At the close, LME three-month copper was 0.7% lower at $7,424 a metric ton, while zinc was down 1.2% at $1,921/ton and tin fell 1.1% to $19,550/ton. Only lead was higher, rising $1 to $1,921/ton.
Crude futures fell Thursday to fresh seven-month lows as data showing a weaker U.S. economy and rising domestic oil stockpiles added to worries about the euro zone.
Light, sweet crude for July delivery settled $1.29, or 1.5%, lower at $86.53 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled $1.60 lower at $101.87 a barrel.
The declines capped the worst month for oil prices since December 2008, with futures falling 17% in May.
Gold futures edged lower as investors weighed weaker manufacturing data against the weaker dollar. The most actively traded contract, for August delivery, fell $1.50, or 0.1%, to settle at $1,564.20 a troy ounce.
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