A rally in global stock markets petered out Thursday but resolute action from the European Central Bank to fight the coronavirus fallout put a floor under losses from investors cashing in on recent gains.
European bourses retreated after major gains earlier in the week, along with Wall Street indices, with investors anticipating a gloomy US jobs report on Friday.
The euro rose and southern European bond yields slipped after the ECB added another 600 billion euros ($675 billion) to its already gigantic stimulus war chest, and said it would continue its pandemic bond-buying for another year at least.
But if boosted ECB support seems huge, so does the expected eurozone downturn it is designed to alleviate, with ECB chief Christine Lagarde forecasting a 2020 contraction of 8.7 percent in the area's gross domestic product (GDP).
As countries gradually begin to reopen, there are signs of the slump "bottoming out", Lagarde said, after just 0.1 percent growth in January-March and a likely "significant contraction" in the second quarter.
But "the improvement has been tepid compared with the speed at which economic indicators plummeted in the preceding months", the former French finance minister added.
"Whatever it takes," said Holger Schmieding at Berenberg. "Like finance ministers, central banks across the advanced world continue to do their utmost to contain the mega recession."
The ECB's move came a day after Germany said it would pump 130 billion euros into a stimulus package to kick-start the region's biggest economy.
At first, European stock markets were unimpressed, with investors locking into profits "after enjoying a very bullish session yesterday", as David Madden, analyst at CMC Markets UK, put it.
But then, some cautious buying brought markets off their worst levels.
- More jobless claims -
While the Dow mustered a narrow gain, both the S&P 500 and Nasdaq retreated after weekly labor data showed another 1.9 million people applied for jobless claims last week taking the total to more than 42 million in the wake of coronavirus shutdowns.
The figures were a grim omen for Friday, when the Labor Department releases the all-important May jobs report that will likely show national unemployment increasing to closer to 20 percent from 14.7 percent in April, the highest unemployment rate in 90 years.
The market "went a little overboard," said Peter Cardillo of Spartan Capital Securities, adding that, "Tomorrow's unemployment numbers are going to be ugly."
American Airlines surged 41.1 percent as it announced it would add more flights in July on improving demand, suggesting the industry had seen the worst of the hit from the coronavirus shutdowns.
Delta Airlines and United Airlines both jumped around 15 percent.
- Key figures around 2050 GMT -
New York - Dow: UP 0.1 percent at 26,281.82 (close)
New York - S&P 500: DOWN 0.3 percent at 3,112.35 (close)
New York - Nasdaq: DOWN 0.7 percent at 9,615.66 (close)
London - FTSE 100: DOWN 0.6 percent at 6,341.44 (close)
Frankfurt - DAX 30: DOWN 0.5 percent at 12,430.56 (close)
Paris - CAC 40: DOWN 0.2 percent at 5,011.98 (close)
EURO STOXX 50: DOWN 0.2 percent at 3,261.67 (close)
Tokyo - Nikkei 225: UP 0.4 percent at 22,695.74 (close)
Hong Kong - Hang Seng: UP 0.2 percent at 24,366.30 (close)
Shanghai - Composite: DOWN 0.1 percent at 2,919.25 (close)
West Texas Intermediate: UP 0.3 percent at $37.41 per barrel
Brent North Sea crude: UP 0.5 percent at $39.99 per barrel
Euro/dollar: UP at $1.1331 from $1.1233 at 2100 GMT
Dollar/yen: UP at 109.16 yen from 108.90 yen
Pound/dollar: UP at $1.2588 from $1.2575
Euro/pound: UP at 89.99 pence from 89.33