U.S. stocks broke a three-day losing streak Thursday on lower than expected initial jobless claims and as an indicator of mid-Atlantic manufacturing activity rose for December.
The U.S. data relief was tempered by comments from the International Monetary Fund Managing Director Christine Lagarde Thursday; Lagarde said the global economic situation remained dour and called for more international help in containing the escalating debt crisis in Europe.
"We had more good news than we've had for a long time - the Spanish bond auction went well and U.S. data was strong," said IG Markets institutional dealer Chris Weston. "But we've got these potential European sovereign debt ratings looming over the market," he added, highlighting the potential for further volatility in markets in the near term.
Many traders were also cautious after Wednesday massive rout for commodities and oil markets amid fears a sharp slowdown in growth will severely crunch demand next year.
Japan's Nikkei Stock Average was up 0.3%, Australia's S&P/ASX 200 was 0.4% higher, South Korea's Kospi Composite rose 0.7% and New Zealand's NZX-50 was off 0.1%.
Dow Jones Industrial Average futures were 24 points higher in screen trade.
Some recently beaten down cyclical stocks managed a modest recovery on the improved sentiment though pockets of weakness continued to hold back regional benchmark indexes.
Sony was up 0.2% and Canon rose 0.3% higher, while Toyota Motor fell 1.7% in Tokyo; Samsung Electronics advanced 1.0%, but Hynix Semiconductor lost 2.0% in Seoul. In Sydney, a profit warning from electronics retailer JB Hi-Fi sent its stock tumbling 14.3% and hurt other retail stocks. Harvey Norman lost 5.7% and David Jones fell 3.9%.
In the currency market, news that Spain had successfully sold EUR6.028 billion of long-term government debt helped stabilize the euro after its recent falls.
But some analysts were less optimistic on the euro's prospects.
"Even if the there was some progress on a resolution to the euro zone debt crisis we doubt that the stress on markets would be relieved overnight," said Mitul Kotecha, strategist at Credit Agricole; "while the crisis has and will not deliver a death blow to the euro it will mean that investors, even official ones, take a much more cautious view on the currency going forward."
The euro was at $1.3035 against the dollar from $1.3016 late Thursday in New York, and was at Y101.49 against the yen from Y101.35. The dollar was at Y77.82 from Y77.85.
Oil futures settled at their lowest level in six weeks Thursday as concerns over slowing global demand continued to weigh, while Comex gold also ended at a new five-month low as investors remained jittery over the debt situation in Europe.
January Nymex crude oil futures were recently up 10 cents at $93.97 per barrel on Globex, while spot gold was at $1,580.60 per troy ounce, up $10 from its New York settlement Thursday.
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