Initial claims for state unemployment benefits rose 46,000 to a seasonally adjusted 388,000, the Labor Department said on Thursday.

Many economists believe a reading below 400,000 points to an improving labor market. The four-week moving average of new claims, which smoothes out volatility and is considered a better measure of labor market trends, rose just 750 last week to 365,500.

"Improvement in the labor market will continue to be fitful and slow," said Joseph Trevisani, a market strategist at Worldwide Markets in Woodcliff Lake, New Jersey.

The government last week reported claims fell an unusually large 30,000 to 339,000 in the October 6 week, the lowest level in more than four years. But a Labor Department official said it appeared that state-level administrative issues were distorting the data at the start of October.

The government adjusts its jobless claims figures to take into account regular seasonal swings. Claims usually increase at the beginning of a quarter, but one state appears to be following a different pattern than normal in reporting its claims, which led to the wild fluctuations recently, the official said.

The official declined to name the state, although the Labor Department said that California was the only state in the week ending October 6 to report a decrease in claims of more than 1,000.

The department on Thursday revised its data from last week to show 342,000 new claims, a still-sharp drop from the prior week.

The distortions could make it hard to assess if the claims data will point to an improvement in hiring in October.

Last week was the same period used by the Labor Department to survey employers and calculate how many workers were added to payrolls in October.

The four-week moving average of new jobless claims was lower than the moving average of 378,500 in the payrolls survey week in September.

"It does look like the labor market is improving at least in that respect," said Pierre Ellis, an economist at Decision Economics in New York.

The economy has recently shown signs of modest strength, with the unemployment rate falling to 7.8 percent in September and retail sales pointing to a pick-up in consumer spending.

Stock futures added to losses after the initial claims data, while yields on U.S. Treasury debt fell to session lows.

(Editing by Andrea Ricci)

Verizon said on Thursday it was on track to meet 2012 financial goals, while adding its capital spending for the year was expected to be lower than 2011's $16.2 billion.

Verizon Wireless, like rivals AT&T Inc, and Sprint Nextel, is spending billions of dollars on upgrading its network to support booming demand for services like web surfing and video on smartphones like the iPhone. Higher data usage, in turn, can translate into better profit for these companies.

"Wireless achieved record profitability in a quarter in which we reported the highest number of retail postpaid gross and net adds in four years," Chief Executive Lowell McAdam said in a statement, referring to new customer numbers.

For the third quarter, Verizon made a profit of $1.59 billion or 56 cents per share compared with $1.37 billion or 49 cents per share in the year-ago quarter, when the firm was hit with costs from a two-week workers' strike and weather damage.

Revenue rose to $29 billion from $27.91 billion in the year-ago quarter. Analysts on average expected revenue of $28.96 billion according to Thomson Reuters I/B/E/S.

Excluding exceptional items, the company reported earnings of 64 cents per share, in line with analysts' expectations.

Its Verizon Wireless venture with Vodafone Group Plc added 1.8 million net new subscribers in the quarter compared with 882,000 in the third quarter the year before.

Verizon Wireless, the No.1 U.S. mobile provider, posted a 7.5 percent increase in its quarterly service revenue to $16.2 billion.

At the end of the third quarter, smartphones constituted more than 53 percent of Verizon Wireless' retail postpaid customer phone base, up from 50 percent at the end of second-quarter 2012, the company said.

About 35 percent of an estimated 1.9 billion cellphones sold worldwide this year will be smartphones. Between 20 percent and 25 percent of people in the world already own smartphones, with the penetration rate rising to 50 percent to 55 percent in the United States, according to research firm Gartner.

(Reporting by Sakthi Prasad and Neha Alawadhi in Bangalore; Editing by Hans-Juergen Peters and Mark Potter)

The Labor Department releases first-time claims for jobless benefits for the week ended October 13 at 8.30 a.m. EDT. Economists forecast a total of 365,000 new filings, compared with 339,000 in the prior week.

China likely hit the bottom of a seven-quarter long economic downturn between July and September, but the slowest three months of growth since the depths of the financial crisis and a cloudy housing market outlook make recovery prospects tepid.

European leaders will try to bridge deep differences over plans for a banking union at a summit on Thursday but no substantial decisions are expected, reviving concerns about complacency in tackling the three-year-old debt crisis.

Verizon Communications Inc (VZ.N) posted higher quarterly revenue on strength in its wireless business after it raised wireless data pricing and started selling the latest Apple Inc (AAPL.O) iPhone.

Morgan Stanley (MS.N) reports third-quarter earnings, which are expected to be bolstered by higher stock and bond prices. Other major companies announcing results include Google (GOOG.O), Microsoft (MSFT.O) and Advanced Micro Devices (AMD.N).

The Conference Board releases its report on September leading economic indicators at 10 a.m. EDT. Economists forecast a 0.2 percent rise, against a 0.1 percent drop in August.

Sprint Nextel (S.N) is negotiating a deal with its partner Clearwire that would give Sprint control of Clearwire without an acquisition, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.

Philadelphia Federal Reserve Bank releases September business activity survey at 10 a.m. EDT. Economists forecast a reading of 1.0, versus -1.9 in August.

American Express Co (AXP.N) shares were down 1.7 percent after the bell on Wednesday following the release of its results. The company's third-quarter profit rose only marginally and spending growth remained muted for the second quarter running as corporate executives cut spending on travel and entertainment.

EBay Inc (EBAY.O) reported strong quarterly results late on Wednesday, but the e-commerce company gave a cautious forecast for the crucial holiday season amid a brewing price war between big retailers and rival Amazon.com Inc AMZN.0. EBay shares were down 4.1 percent after the bell.

European shares .FTEU3 fell 0.1 percent on Thursday on concerns over corporate earnings.

The S&P 500 rose for the third consecutive day on Wednesday after housing starts hit a four-year high, but the Dow was weighed down by IBM after it posted weak revenue.

The Dow Jones industrial average .DJI rose 5.22 points, or 0.04 percent, to 13,557 at the close. The Standard & Poor's 500 Index .SPX gained 5.99 points, or 0.41 percent, to finish at 1,460.91. The Nasdaq Composite Index .IXIC advanced 2.95 points, or 0.10 percent, to close at 3,104.12.

(Reporting by Atul Prakash; editing by Patrick Graham)

In another clear bid for younger voters, President Barack Obama will appear this evening on Jon Stewart's "Daily Show," the sort of venue challenger Mitt Romney has avoided so far.

Obama defeated Republican John McCain by a roughly two-to-one margin among voters aged 18 to 29 in 2008. The president's lead is large but less commanding this time around. Likely voters in this age group prefer Obama to Romney by 54 percent to 36 percent in Reuters/Ipsos polling from the week ending October 14. bit.ly/QY09hI

The Romney campaign is working to mobilize students unhappy with the president's record, with 188 chapters of a pro-Romney student group on campuses in 11 "target states," according to a campaign aide.

"I don't think you'll see the president enjoying the same amount of support that he had in 2008, very simply because the Obama economy has created a lost generation of young voters," the aide said.

He added that the campaign's young groups have made over 2 million "voter contacts," either by "calling them, knocking on the door, having a friend drive them to the polls."

The Obama campaign has gone a step further, bringing buses to some campus rallies that later take students to register or vote early.

For both sides the efforts to register students living on campus have been complicated in some swing states by new voter ID and verification laws. In Florida, for instance, voters who are away from home on election day will not be able to cast out-of-county provisional ballots.

A list provided to Reuters by the Obama campaign names 26 schools the president visited between the end of March and the beginning of October, while Romney aides estimated that the former governor has visited "roughly 50" campuses.

Obama has largely visited community colleges and big state schools, while Romney's most prominent visits have been specially tailored. His major foreign policy address of the fall was at Virginia Military Academy on October 8. When he was looking to establish his credentials with evangelical voters after the primary season in May, he delivered the commencement address at Liberty University in Lynchburg, Virginia.

In Ohio in mid-September, Romney visited the home of the 2011 national intercollegiate dressage champions: Lake Erie College. Romney's wife, Ann, is the owner of a horse that competed in dressage in the 2012 Olympics in London.

The Romney campaign has an uphill climb with the youngest voting demographic. Likely voters overall believe Democrats are better for young Americans than Republicans by a 44 percent to 29 percent margin. For likely voters between 18 and 29 years old, this gap is an overwhelming 53 percent to 19 percent.

Undaunted, the Romney aide said "I don't have a percentage or a volume that's the magic number we're going to win here. Our goal is to go out and talk to every young American."

(The Reuters/Ipsos database is now public and searchable here: tinyurl.com/reuterspoll)

(Editing by Prudence Crowther)

The event will likely draw thousands of supporters to the McCormick Place convention center in Chicago, Obama's hometown and the site of his re-election campaign headquarters.

Supporters are expected to watch the voting results come in and then hear a speech by the incumbent Democrat who faces Republican Mitt Romney, a former Massachusetts governor and private equity executive, in the November 6 general election.

Some 240,000 revelers flooded Chicago's 319-acre (129-hectare) Grant Park in the city's central business district on the night Obama beat John McCain in 2008 to become the first black U.S. president.

Chicago Mayor Rahm Emanuel, a former White House aide who has helped raise cash for a pro-Obama "super" political action committee, will attend the rally, said spokeswoman Sarah Hamilton.

"We are excited and honored to once again host President Obama on election night," Hamilton said. "Chicago is more than capable of safely hosting this historic event in November."

McCormick Place, which was the principal site of a NATO conference in May, is the largest exhibition and meeting facility in North America, according to its website. It has roughly 2.6 million square feet (240,000 square metres) of exhibit space and assembly seating for 18,000 people.

An Obama campaign official declined to comment on the reason why the smaller-capacity convention center was chosen as the venue for this year's rally over Grant Park.

The official, who asked not to be identified, said plans for the rally were still being worked out and declined to say how many people the campaign expects to attend.

Obama leads Romney by 47 percent to 44 percent among likely voters, according to Wednesday's Reuters/Ipsos daily online tracking poll.

(Editing by Mohammad Zargham)

The brighter tone for risk assets weighed on safe-haven U.S. Treasuries, the dollar and the yen.

China's third-quarter gross domestic product grew 7.4 percent from a year earlier, the slowest pace since the first quarter of 2009 and marking the seventh straight quarter of slower growth, but matching expectations.

Other data such as fixed asset investment, retail sales and industrial output slightly exceeded forecasts.

"This is within expectations, the economy is showing signs of stabilizing, that is good news," said Dong Tai, economist at Credit Suisse in Hong Kong. "We think that with rebounding property markets, stabilizing export orders, resuming consumption, we probably have seen the bottom of the economy."

The MSCI index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.6 percent, rising for a third day in a row with its energy .MIAPJEN00PUS and materials .MIAPJMT00PUS leading the increase.

Hong Kong shares .HSI were up 0.4 percent and Shanghai shares .SSEC inched up 0.5 percent, while shares in Australia .AXJO jumped 1.1 percent to a fresh 15-month high, supported by the resources sectors which drew strength from signs the slowdown is drawing to an end in China, Australia's largest export market.

The commodities-sensitive Australian dollar briefly touched a two-week high of $1.0395 after the Chinese data, and last traded at $1.0384.

The benchmark Thomson Reuters-Jefferies CRB index .CRB, a global commodities benchmark, has recovered less than a third of its drop from its recent peak in September, offering more scope on the upside.

"The data for September suggests China's economy likely bottomed in July-August and is set to recover, and this will help ease fears about further downside risks to the Chinese economy," said Hirokazu Yuihama, a senior strategist at Daiwa Securities. "There aren't clear signs that demand from China is picking up but sentiment for commodities is improving and this should eventually support growth-sensitive assets," he said.

Japan's Nikkei average .N225 jumped 1.7 percent to its highest in nearly three weeks on a weaker yen. .T

YEN SLIPS

The dollar rose to a one-month high of 79.22 yen, with traders keen to see if it will test its 200-day moving average which stands around 79.40.

The dollar index .DXY, which measures the greenback against a basket of six major currencies, inched up 0.1 percent to 79.120, off a one-month low of 78.935 seen on Wednesday.

U.S. housing starts surged 15 percent in September, the fastest pace in over four years, bolstering sentiment that had already perked up on a fall in the U.S. jobless rate and strong retail sales.

That lifted Wall Street despite concerns that sluggish world economic growth would curtail corporate America's year-long streak of profit growth.

As investors recovered some risk appetite, the benchmark 10-year U.S. Treasury yield rose to a one-month high of 1.81 percent on Wednesday for its biggest two-day rise since late July.

"The broad USD is battling between its use as a funding currency to invest in emerging markets, and a rise in its value linked to higher yields and growth expectations," Societe Generale said in a research note.

"For now this translates into a higher USD/JPY as the most yield sensitive currency," the note said, explaining the dollar's advance against the yen

Investors were cautious ahead of a meeting of European leaders in Brussels on Thursday and Friday, watching for possible discussions over bailouts for struggling Spain and Greece.

The euro steadied around $1.3110, after reaching a one-month high of $1.3140 on Wednesday.

European leaders will try to bridge deep differences over plans for a banking union at the summit, but no substantial decisions are expected, reviving concerns about complacency in tackling the three-year-old debt crisis.

Clear decisions on helping Cyprus, Greece and Spain may also only come at a finance ministers' meeting next month, officials say.

Asian credit markets firmed, with the spread on the iTraxx Asia ex-Japan investment-grade index tighter by 3 basis points.

U.S. crude futures were steady at $92.10 a barrel while Brent inched up 0.2 percent to $113.40.

(Editing by Simon Cameron-Moore)

The convention, where President Barack Obama officially accepted his nomination on September 6, marked the first time the Democratic Party, seeking to set an example, had set limits on sources of funding. It banned donations from corporations and lobbyists and capped individual donations at $100,000.

But several large corporations contributed free-of-charge goods and services to the account funding the Democratic National Convention. Scores more donated to a separate fund exempt from those limits because it was meant to finance activities "of ongoing value" to the host city of Charlotte, North Carolina, and not the Democratic event itself.

Republicans had no similar restrictions on donations for their convention.

Labor unions, a traditional source of cash for the Democrats, gave $3 million.

Charlotte-based Duke Energy was the strongest corporate financial muscle behind the Democratic convention, giving $1.6 million in in-kind donations by providing office space and furniture, travel, consulting and parking spaces, according to Federal Election Commission disclosures

The company wrote another $4.1 million check to the second, separate fund, called New American City. Chairman Jim Rogers contributed a total of $339,523 in both regular and in-kind donations for travel and personal staff expenses for fundraising, according to the filings.

Duke also guaranteed a loan that convention organizers had to take out to cover a money shortfall, Democratic officials said.

AT&T financed $298,562 worth of "delegate bags" and "catering for suites" for the main convention fund and gave $1 million to the New American City fund, filings showed.

Bank of America, also based in Charlotte, contributed $271,864 worth of furniture and office space to the convention and gave $5 million to the New American City fund.

Microsoft Corp contributed $71,521 worth of catering, the Coca-Cola Company funded $69,590 worth of delegate bags and Costco bought $27,000 worth of food and service items. Half Moon Bay Brewing Co provided $5,000 worth of beer and Chiquita Brands International Inc supplied $4,000 worth of bananas, among others.

"Beyond showcasing Charlotte for the entire world, the convention generated millions of dollars in economic activity for our community and valuable infrastructure improvements," said Dan Murrey, executive director of the host committee.

"We have accomplished all of this without passing any of these costs on to the taxpayers."

In all, the main "Charlotte 2012" fund sponsoring the convention raised $24.1 million. But it came up short of the necessary funds and had to take out a $10.9 million loan. Organizers still owe almost that amount after spending $29.9 million.

The New American City, for its part, raised $19 million and spent $19.6 million. It also holds $1.3 million in debt.

The fund's other biggest donors included Time Warner Cable Inc, meetings and events planning firm Experient Inc, Wells Fargo & Co bank and Charlotte-based Mechanics & Farmers Bank.

The biggest labor union donors, giving $500,000 each, were the Service Employees International Union, the American Federation of State, County and Municipal Employees and the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry.

(Editing by Bill Trott)