At midday: Dow, TSX pare losses

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North American stocks pared their losses in midday trading on Thursday, after a slew of disappointing economic news from Europe, China and the United States weighed on major indexes in earlier trading.

At noon, the Dow Jones industrial average was down 1 point, to 13,577. The broader S&P 500 was down 2 points or 0.2 per cent, to 1,459. In Canada, the S&P/TSX composite index was down 34 points, or 0.3 per cent, to 12,402.

The moves follow new signs that the global economy is sputtering, despite recent efforts by central banks to provide another round of stimulus to put the recovery back on track.

In China, an initial reading of manufacturing activity in September from HSBC showed another contraction, suggesting that one of the key growth engines for the global economy is sputtering.

In the euro zone, business activity contracted at the sharpest pace since June, 2009, highlighting once again the deep economic hole the region is in.

In the United States, initial jobless claims for the period ended last week remained elevated, at 382,000, falling by just 3,000 from the previous week and missing expectations for a bigger decline. As well, the four-week moving average for claims rose for the fifth straight week.

Some key economically sensitive stocks were among the biggest laggards. Norfolk Southern, the U.S. railroad, fell 8.9 per cent after reporting that its third-quarter earnings are likely to be lower than expected. Its warning follows FedEx Corp.'s reduced full-year forecast as the global shipping company pointed to a week global economy.

Canadian National Railway fell 4.6 per cent.

Bank of America Corp. fell 1.1 per cent after it announced that it will slash an additional 16,000 jobs by the end of the year.

Canadian energy stocks made a comeback, after tumbling crude oil prices weighed on oil producers in recent trading sessions. Suncor Energy Inc. rose 0.7 per cent and Canadian Oil Sands Ltd. rose 1.5 per cent.