US stocks retreated on Thursday after two positive sessions. Investors reacted to job cuts at AT&T and other major companies ahead of Friday's employment data.

The Dow fell 215.45, or 2.51 per cent to 8,376.24, while the NASDAQ was down 46.82, or 3.14 per cent to 1,445.56. The S&P 500 slid 25.51, or 2.93 per cent to 845.23.

Telecom giant AT&T said it would cut 12,000 jobs, or 4 per cent of its workforce. The company cited economic pressures and said it would take a charge of US$600 million in the fourth quarter due to severance payments.

AT&T said it would reduce its 2009 capital expenditures from its 2008 levels. The company's shares closed 3.1 per cent lower.

Fellow Dow component, DuPont said it would cut 2,500 jobs. The company said the reductions were in response to current market challenges. DuPont crept 0.4 per cent higher.

Meanwhile, Viacom, the owner of MTV Networks and Paramount Pictures, said it would cut 850 jobs, or 7 per cent of its workforce. Viacom stock edged 0.1 per cent lower.

The announcement dampened sentiment as investors braced themselves for Friday's unemployment data.

In other economic news, October factory orders were down 5.1 per cent after falling 2.5 per cent in September.

Carmakers were also in the spotlight. Executives from General Motors, Ford and Chrysler were in Washington today, trying to secure a US$34 billion government bailout package. General Motors and Ford were down 16.1 per cent and 6.7 per cent on concerns that legislators wouldn't rescue them.

Looking to financials, Bank of America fell 4.7 per cent and Citigroup slid 5.4 per cent, while JPMorgan managed to close 2.7 per cent higher. Wells Fargo was down 2 per cent and Goldman Sachs slid 2 per cent. Morgan Stanley rallied 7.9 per cent.

American Express, MasterCard and Visa fell 4.7 per cent, 3.4 per cent and 3.1 per cent respectively.

Elsewhere, Wal-Mart reported a 3.4 per cent rise in November same-store sales, toping company forecasts.

The retailer has been able to withstand the downturn in spending better than most as consumers seek out discounts. Wal-Mart shares gained 1.3 per cent.

Target's same store sales fell 10.4 per cent in November. Sales at Nordstrom and Abercrombie & Fitch dropped 15.9 per cent and 28 per cent respectively.

Target shares were down 1.3 per cent, while Nordstrom and Abercrombie & Fitch rallied 10.2 per cent and 7.8 per cent respectively.

Elsewhere in the sector, The Gap picked up 2.5 per cent, Macy's rose 6 per cent and J.C. Penney added 7.5 per cent.

Meanwhile, NYMEX light crude oil for January delivery fell US$3.12 to US$43.67 a barrel. Exxon Mobil slid 3.4 per cent, Chevron was down 4 per cent and ConocoPhillips closed 7 per cent lower.

COMEX gold for February delivery fell US$5 to US$765.50 an ounce.

UK Markets

British stocks came off highs after the Bank of England cut interest rates by an anticipated 1 per cent. A broker downgrade saw mining stocks decline, but oil companies limited losses.

The benchmark FTSE 100 slipped 6.35, or 0.15 per cent at 4,163.61, after a high of 4,261.07.

Financials were mixed after the lending rate was cut to 2 per cent, its lowest level in 57 years.

HBOS rallied 7.4 per cent but suitor Lloyds TSB was down 0.7 per cent. Barclays dropped 1.7 per cent.

Man Group increased 5.5 per cent and Legal & General advanced 6.4 per cent. Friends Provident climbed 6.3 per cent, Aviva added 4.4 per cent and Standard Life rose 2.7 per cent.

Housebuilders rallied despite a Halifax house price survey indicating that prices dropped at their fastest monthly rate since records began 25 years ago.

Barratt Developments jumped 9.4 per cent and Persimmon advanced 2.7 per cent.

Oil companies rose despite a fall in crude prices. BP was up 1.1 per cent, BG Group gained 6.3 per cent and Tullow Oil edged 0.5 per cent higher.

Miners were hurting after Goldman Sachs downgraded the metals and mining sector.

Xstrata tumbled 8.8 per cent, Lonmin slipped 0.7 per cent and Antofagasta was down 4.4 per cent.

Aussies BHP Billiton and Rio Tinto declined 1.4 per cent and 5.3 per cent respectively.

European Markets

European stocks slipped after the European Central Bank cut interest rates by 75 basis points to 2.5 per cent. The move was largely expected and failed to excite investors across the continent.

Germany's DAX edged 3.01, or 0.07 lower at 4,564.23, while France's CAC 40 lost 5.49, or 0.17 per cent at 3,161.16.

France unveiled a 26 billion euro stimulus plan as unemployment rose.

Credit Suisse added 10 per cent after the company said it would cut 5,300 jobs, or 11 per cent of its workforce after the first two months of the quarter saw losses of 3 billion francs. The company said the staff cuts would save 2 billion francs in costs.

Credit Agricole gained 8 per cent after the bank said it had solid capital levels to prepare for the post-crisis period. In Germany, Commerzbank added 0.7 per cent and Deutsche Bank was 1.9 per cent higher.

On the downside, Swedbank fell 8.8 per cent after Sweden's central bank cut its interest rates by a bigger-than-expected 175 basis points to 2 per cent.

European drugmakers slipped with AstraZeneca down 1 per cent and Novartis off 0.6 per cent.

Meanwhile, Philips fell 2.1 per cent after dropping its earnings targets. Nokia shares climbed 4 per cent, taking back recent losses.

Insurance were on positive ground after JPMorgan raised its taget prices on a number of stocks. Vienna Insurance jumped 8.7 per cent, Hannover Re rose 0.5 per cent and Baloise gained 9.1 per cent. Germany's Allianz added 3.4 per cent.

Japanese Markets

The Japanese bourse let go of 1 per cent on Thursday as profitability concerns hit exporters affected by the global slowdown. Merger talks between Nippon Oil and Nippon Mining also failed to ignite sentiment.

The Nikkei 225 slipped 79.86 points or 0.99 per cent to 7,924.24. The index has rallied over 13 per cent since hitting 26 year lows in October.

Automakers took a hit as the yen strengthened against the US dollar. Toyota, Suzuki and Nissan all fell between 3.5 per cent and 6.4 per cent.

Honda slumped 6.4 per cent after saying it expected the US vehicle market to fall by about 5 per cent next year and that it could reduce production further after making cutbacks.

Merger news from Nippon Oil and Nippon Mining led to the stocks rising 3.4 per cent and 11.3 per cent respectively.

An analyst said the merger would be positive for both the companies and the domestic refining industry, which suffers from stiff price competition.

Bank shares were also weighed down by poor sentiment after rate rises by private banks in the region.

Mitsubishi UFJ Financial Group was down 2.1 Mizuho Financial Group lost 2.8 per cent.

Hong Kong Markets

The Hong Kong market let off some steam Thursday, falling 0.6 per cent after being up as much as 2 per cent during the day. News of an increase in home loan rates weighed on investor sentiment.

The benchmark Hang Seng Index finished 78.88 points or 0.58 per cent lower at 13,509.78.

Property firms were sold down after Bank of China and HSBC this week raised their mortgage rates by between 50 basis points and 75 basis points.

Cheung Kong was 3.4 per cent weaker, while rivals Henderson Land slipped 2.5 per cent and Sun Hung Kai Properties edged 1.2 per cent lower.

Top Chinese lender ICBC added 1.8 per cent, while smaller rival China Construction Bank gained 2.1 per cent, on hopes China will further cut the reserve requirement on deposits to spur credit creation and lending.

China Life Insurance was up 1.2 per cent, while smaller rivals Ping An jumped 5.4 per cent and PICC P&C soared 10.2 per cent.

The Overnight MarketWatch report is provided by SHAW Stockbroking's egoli - simple but informative market news for the everyday investor.

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