Stocks: Thursday's review

Japanese stocks rose, sending the Topix index to its longest winning streak since June, on speculation that Europe will step up efforts to control its debt crisis and as the U.S. economy showed more signs of recovery.
Mitsubishi UFJ Financial Group Inc., Japan’s largest publicly traded bank, led lenders higher. Honda Motor Co., a carmaker that gets about 80 percent of its sales abroad, climbed 1.8 percent as the euro strengthened, boosting the outlook for export earnings. Canon Inc., the world’s biggest camera maker, advanced 2.1 percent. Inpex Corp., Japan’s largest oil and gas explorer, rose 2.1 percent as crude prices increased.

European stocks declined from a 28- month high as a larger-than-forecast increase in U.S. initial jobless-benefit claims overshadowed gains by banks after Spain and Italy sold bonds.
Nestle SA, the world’s biggest food company, fell 3 percent on analyst downgrades. Dixons Retail Plc slumped 10 percent after saying earnings will probably be “around the bottom end” of estimates. Commerzbank AG lost 1.2 percent after announcing a capital increase. Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, Spain’s largest banks, climbed as demand increased at an auction of the nation’s debt.
The European Central Bank kept interest rates at a record low today as ECB President Jean-Claude Trichet said inflation pressures in the euro region have picked up. The Governing Council set the benchmark rate at 1 percent for the 21st month

U.S. stocks fell, pulling benchmark indexes down from two-year highs, as a bigger-than-forecast increase in jobless claims tempered optimism about fourth- quarter earnings reports.
Merck & Co. slid 6.7 percent, the biggest drop in the Dow Jones Industrial Average, as a trial for a blood-thinner drug was halted. Deere & Co. rose 2.6 percent after being raised to “overweight” at JPMorgan Chase & Co., while Micron Technology Inc. jumped 3.2 percent as Robert W. Baird & Co. advised buying shares of the largest U.S. maker of memory chips.
The Standard & Poor’s 500 Index 0.2 percent to 1,283.14 at 2:18 p.m. in New York after yesterday rising to the highest since August 2008. The Dow Jones Industrial Average fell 36.25 points, or 0.3 percent, to 11,719.19.