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Dec. 1, 2011 at 12:36 PM
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U.S. markets flat after one-day rally

NEW YORK, Dec. 1 (UPI) -- U.S. markets opened flat Thursday after a one-day rally pushed the Dow Jones industrial average to its highest one-day jump since March 2009.

Among the positive reports issued Wednesday that pushed the Dow up 490 points, Automatic Data Processing Inc. said 206,000 private sector jobs had been added to the U.S. economy in November. On Thursday, however, the U.S. Department of Labor said 6,000 additional first-time unemployment claims had been filed in the latest week,

The total of 402,000 first-time claims filed beat economist expectations of 390,000 filings.

In early afternoon trading on Wall Street, the Dow Jones industrial average lost 0.26 percent, 31.22 points, to 12,014.46. The Standard & Poor's 500 index lost 0.12 percent, 1.17 points, to 1,245.79. The tech-heavy Nasdaq composite index lost 0.01 percent, 0.37 points, to 2,619.92.

The benchmark 10-year treasury note fell 13/32 to yield 2.122 percent.

In Tokyo, the Nikkei 225 index added 1.93 percent, 162.77, to 8,597.38.

European bourses traded mixed early Thursday but their Asian counterparts closed with big gains spurred by the credit-easing steps by leading central banks.

Investors in Europe were expected to follow the Asian, but that was not to be.

Britain's FTSE 100 was showing strength, rising 0.52 percent to 5,534 early Thursday, but Germany's DAX was down 0.31 percent to 6,070 and France's CAC-40 was off 0.33 percent to 3,144.

Asian markets didn't look back after the start bell as investors kept buying on the strength of Wednesday's announcement by the U.S. Federal Reserve and central banks of five other nations to cut rates to make it easier for banks everywhere to borrow U.S. dollars and ease their credit crunch.

Separately China's central bank lowered banks' reserve requirement ratio by 0.5 percentage point, the first such cut in three years, to boost the banking system's liquidity.

South Korea's Kospi surged 69 points, or 3.7 percent, to end the day at 1,916.

Hong Kong's Hang Seng Index soared 1,013 points, or 5.6 percent, to 19,002 while China's Shanghai Composite Index tacked on 54 points, or 2.29 percent, to 2,387.

Australia's All Ordinaries advanced 103 points, or 2.47 percent, to 4,288, near its intraday high.

Markets in Singapore, Taiwan and India also closed with impressive gains.

In currencies, the euro stood at about $1.35 after topping $1.34 Wednesday following a coordinated move by the U.S. Federal Reserve, Bank of England, European Central Bank, Bank of Japan, Bank of Canada and Swiss National Bank to cut by about half the cost for non-U.S. banks to borrow U.S. dollars from their central banks, which in turn get those dollars from the Fed.

The central banks said the cheap U.S. dollar loans would be available until February 2013, extending a previous August 2012 deadline.

The synchronized action didn't directly address Europe's government-debt and budget crises but sought to ease the effects of the crises on global markets, The Wall Street Journal said.

The move also highlights the possibility of other central-bank steps if markets or the global economy deteriorate, the Journal said.

The benchmark 10-year treasury note fell 13/32 to yield 2.122 percent.

The euro rose to $1.3465 from Wednesday's $1.3445. Against the yen, the dollar rose to 77.73 yen from Wednesday's 77.63 yen.


Chinese manufacturing activity shrinks

BEIJING, Dec. 1 (UPI) -- Chinese manufacturing activity shrank in November, the first decline since February 2009, the China Federation of Logistics and Purchasing said Thursday.

The agency said the November Purchasing Managers' Index, a closely watched indicator of manufacturing activity, dropped to 49 percent from the previous month's 50.4 percent, pointing to the impact of the European economic crisis and effects of the Chinese government's anti-inflationary measures.

In the CFLP PMI, which is based on a survey of purchasing managers in more than 820 companies in 20 industries, any reading of 50 percent or more indicates expansion, China's official Xinhua news agency said.

The CFLP said new orders in November were 47.8 percent, down 2.7 percent from October. November's export orders fell to 45.6 percent, from October's 48.6 percent, suggesting the eurozone debt crisis and weakened demand from the European Union and the United States are affecting China's growth.

Agency Director Cai Jin said the November PMI confirmed a continuous trend of cooling growth, Xinhua reported.

China's gross domestic product in the third quarter grew 9.1 percent year-on-year, down from 9.5 percent in the second quarter and 9.7 percent in the first quarter.

China central bank lowers RRR

BEIJING, Dec. 1 (UPI) -- China's central bank, encouraged by easing inflation, lowered the bank reserve requirement ratio by 0.5 percentage point, the first such cut in three years.

The monetary policy action by the People's Bank of China, designed to boost the banking system's liquidity, comes at the same time as the U.S. Federal Reserve and the central banks of five other countries decided to cut rates to make it easier for banks everywhere to borrow U.S. dollars and ease their credit crunch.

The Chinese central bank's action, effective Monday, would lower the RRR to 21 percent for large commercial banks and 17.5 percent for mid- and small-sized banks, China's official Xinhua news agency reported.

The lower rate would allow these banks to lend more of their deposits instead of keeping them in reserves.

The bank said its action is expected to allow banks to release about $63 billion of capital into the market.

Analysts were quoted as saying the move also signals the Chinese government is set to stabilize economic growth after easing inflationary pressures.

Government data showed China's inflation dropped to 5.5 percent in October from a 37-month high of 6.5 percent in July. Analysts expect the rate to fall to less than 4 percent in December.

Eurozone manufacturing slowed in November

LONDON, Dec. 1 (UPI) -- Manufacturing activity in Europe slowed in November, hitting a 28-month low in the eurozone, research firm Markit Economics said Thursday.

The Purchasing Managers Index for the eurozone dropped to 46.4 in November from October's 47.1.

Numbers above 50 indicate business growth and numbers below show a contraction.

The index for France and the Netherlands hit 29-month lows at 47.3 and 46, respectively. For Germany and Austria, the index hit 28-month lows at 47.9 and 47.6, respectively.

The index for Italy and Greece hit two-month highs at 44 and 40.9, respectively.

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