LCG London Cap

By Tommy Stubbington and Riva Gold 

Global stock markets climbed Thursday, extending their rebound from heavy declines into a second session.

The Dow Jones Industrial Average advanced 0.3% to 16339 in early trade. The S&P 500 rose 0.4% and the Nasdaq Composite edged up 0.1%.

The Stoxx Europe 600 climbed 0.6% early afternoon, as markets pared earlier gains.

Tentative signs that a slowdown in China's manufacturing sector may be bottoming out helped shares add to Wednesday's rise, which came as U.S. and European indexes ended their worst quarter in four years on a high note.

China's official manufacturing purchasing managers index ticked up slightly to 49.8 in September, beating expectations. A competing private gauge of nationwide manufacturing activity, the Caixin China manufacturing PMI, was down slightly at 47.2 in September, a six-year low, compared with 47.3 in August.

In the eurozone, manufacturing data showed the pace of expansion slowed slightly in September.

"Much of the uncertainty is already in the price. Investors are well aware of the impending economic slowdown," said Jeremy Batstone-Carr, chief economist and strategist at London-based brokerage and wealth manager Charles Stanley.

But a disappointing batch of third-quarter corporate earnings could cause the recent rebound in markets to fade quickly, according to Mr. Batstone-Carr.

"I'd be concerned about sounding the all clear, particularly as we head into the reporting season," he said.

Asian markets extended gains after the economic data was released. Australia's S&P/ASX 200 rose 1.8%.

Japan's benchmark Nikkei Stock Average climbed 1.9%. Investors in Japan also considered the Bank of Japan's latest corporate survey, which showed that big manufacturers were more cautious about the economy in the third quarter as exporters were pressured by China's slowdown.

Markets in China and Hong Kong were closed for national holidays.

European shares gave up much of their early gains as commodities trader and producer Glencore PLC was hit by renewed declines, having climbed sharply earlier in the session. Glencore shares fell 2.9%.

In the U.S. the early gains for stocks came after employment data remained consistent with an improving labor market. Initial jobless claims, a proxy for layoffs, rose by 10,000 to 277,000 in the week ended Sept. 26, the Labor Department said Thursday. Economists had expected 271,000 new claims.

Investors were looking ahead to Friday's U.S. jobs report, which is closely watched by Federal Reserve officials as they decide when to raise short-term interest rates. The Fed's decision to hold rates at record lows in September helped fuel fears of slowing global growth.

Economists expect 200,000 jobs were created in September and estimate that the unemployment rate held at 5.1%.

In currency markets, the euro fell 0.1% against the dollar to $1.1165. The dollar was 0.1% lower against the yen at Yen119.79.

In commodities, Brent crude oil was up 2.2% at $50.20 a barrel. Gold was flat at $1,115.50 a troy ounce.

Write to Tommy Stubbington at tommy.stubbington@wsj.com

(END) Dow Jones Newswires

October 01, 2015 09:50 ET (13:50 GMT)

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