While you were sleeping: Facebook soars, US jobs eyed

Wall Street closed slightly down as investors were on tenterhooks about Friday's US jobs data to gauge how serious the Federal Reserve might be in its repeated comments about a potential December interest rate hike.

A Labor Department report showed initial claims for state unemployment benefits rose 16,000 to a seasonally adjusted 276,000 for the week ended October 31. It was the highest level in five weeks, as well as the biggest weekly gain since late February.

Fed chairwoman Janet Yellen on Wednesday reiterated a December rate rise was still possible.

"Investors have adjusted their probabilities, adjusted their risk, adjusted their positions, now they're going to see what happens tomorrow," says Connecticut-based Americas head of strategy John Briggs, referring to the US jobs data.

At the close on Wall Street, the Dow Jones Industrial Average was down 4.15 points to 17,863.43. The Standard & Poor's 500 Index slipped 0.1% to 2099.93 while the Nasdaq Composite Index eased 0.4% to 5127.74.

A separate report on Thursday showed productivity unexpectedly increased at a 1.6% annualised rate in the third quarter, while labour costs gained less than forecast.

In the Dow, gains in shares of Visa and those of JPMorgan Chase, last up 1.6% and 1.2% respectively, offset declines in shares of Chevron and those of Apple, last down 1.4% and 1.3% respectively.

US Treasurys declined.

"The tone has changed, people are now anticipating the Fed to tighten in December, and tomorrow's employment report is going to be critical," New York-based RW Pressprich & Co managing director of government-debt trading Larry Milstein told Bloomberg.

"You're going to need a pretty significant miss to get the Fed off tightening in December."

Shares of Facebook jumped 4.6% after the company reported sales and profit that surpassed expectations.

"Their core mobile-advertising business is still very strong and has a lot of runway," Edward Jones & Co analyst Josh Olson told Bloomberg. He has a buy rating on the stock.

Qualcomm, however, disappointed, sending its stock tumbling. It last traded 14% lower.

There were fresh deals, too. Shares of HomeAway jumped 24.3% after Expedia said it had agreed to buy the company for $US3.9 billion.

In Europe, the Stoxx 600 Index finished with a 0.4% decline from the previous close, weighed down by energy and commodity stocks.

The UK's FTSE 100 Index dropped 0.8%, while the pound weakened as well, as the Bank of England downgraded its growth and inflation forecasts.

However, BoE  governor Mark Carney told Bloomberg that it would be "prudent" for Britons to prepare for a 2016 rate rise.

France's CAC 40 Index added 0.4%, while Germany's DAX Index increased 0.6%.

Updated for market close at 10am (NZ time)

(BusinessDesk)