Global data encouraging, Fed fears linger
Economic data is what drove markets on Thursday. The latest jobless claims report showed a rise in initial claims to 336,000, a bit higher than the 330,000 economists were looking for. July leading indicators were better than expected and Markit's "flash" U.S. manufacturing purchasing managers index posted its best showing since March.
"I do think the economy is in better shape than most people think, and that's why I think this setback over the last few days is a buying opportunity," Jim McCaughan of Principal Global Investors said.
In global economic data, HSBC's preliminary reading of Chinese PMI for August crossed the key 50-level for the first time in four months thanks to a rebound in new orders, pointing to potential stabilization.
"China's manufacturing growth has started to stabilize on the back of modest improvements in new business and output. This is mainly driven by the initial filtering through of recent fine-tuning measures and companies' restocking activities," said Qu Hongbin, the co-head of Asian economic research at HSBC.
European markets closed higher after Germany's PMI for August climbed in July. Broader euro zone PMI data also beat expectations.
"They're certainly good numbers, and we've been seeing this for the last four or five months in Europe," Richard Jerram, chief economist at the Bank of Singapore, told CNBC. "It does seem that as the headwinds from fiscal tightening fade, then the economies are starting to lift."
(Read more: Euro zone flash PMI at highest level since June 2011)