By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- German stocks were flirting with extending its record streak into a third straight day on Thursday, while the broader European stock markets trimmed losses after better-than-expected U.S. jobs data.

The Stoxx Europe 600 index was slightly lower at 303.58, after closing at the highest level since June 2008 on Wednesday.

The index was still looking at a more than 20% gain over the past 12 months, boosted by cheap liquidity from central banks' efforts to kick-start lackluster economies.

In the same vein, the European Central Bank cut interest rates to a record low of 0.5% last week, sending most of Europe's major indexes to 2013 highs.

On Thursday, however, investors paused for breath after recent days' rally, with little data to push markets in either direction, said Keith Bowman, equity analyst at Hargreaves Lansdown in London.

"There are no catalysts today. We have seen corporate results beginning to wind down a bit in the U.S., and maybe the next catalyst is U.S. retail sales that are out on Monday," Bowman said. "The weekly jobless figures from the States gave some reassurance if you like, but it's not on the same level as the monthly figures."

"For now, the biggest support comes from central banks globally that are very firmly in place to ease, and there are no other obvious reasons for the high levels we're seeing," he added.

Among the biggest decliners in the pan-European index, shares of miner Eurasian Natural Resources Corp. dropped 4%, after the firm reported mixed first-quarter output results with iron ore, ferroalloy and aluminum down on the year, while copper output improved in the period.

Bucking the negative trend, shares of Experian PLC jumped 6.3%. The credit-report firm said it would continue to buy its own shares, while also raising full-year dividends 9%. The company, however, posted a 36% drop in pretax profit for the full year.

Jobless claims

The broader European stock markets trimmed losses in afternoon action, after U.S. data showed initial jobless claims last week dropped to the lowest level since January 2008.

U.S. stocks traded lower on Wall Street, after the Dow Jones Industrial Average (DJI) and S&P 500 index (SPX)both closed at all-time peaks on Wednesday.

Investors also looked east where most Asian bourses fell after data showed consumer prices rose more than expected in China. The April CPI rose 2.4% from a year earlier, topping analysts forecasts and increasing more than the 2.1% reported in March.

Some analysts feared that the rising inflation may discourage the Chinese government from easing policy further, which would mean less liquidity injected into the economy.

"Should this happen then the consequences will likely be played out on a global basis, but given the overshoot was so limited, the caution may be somewhat exaggerated by the fact markets are simply looking a bit toppy at these levels," said Fawad Razaqzada, market strategist at GFT Markets, in a note.

In the U.K., the Monetary Policy Committee at the Bank of England on Thursday decided to leave the key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank also left the size of its asset-purchase program unchanged at 375 billion pounds ($582.90 billion). Both decisions were expected by most analysts.

Movers

The U.K.'s FTSE 100 index traded 0.1% higher at 6,586.47.

Shares of Standard Chartered PLC shaved off 2.5% after J.P. Morgan Cazenove cut the bank to neutral from overweight a day after the company reported a drop in first-quarter profit.

British Sky Broadcasting Group PLC sank 6%, after BT Group PLC revealed its new sport commercial TV packages for pubs and hotels at significantly lower prices than Sky. Shares of BT lost 2.3%.

France's CAC 40 index posted one of the biggest drops among country-specific indexes, down 0.6% at 3,931.68.

Heavyweight drug maker Sanofi SA (SNY) lost 0.7%, as the stock went ex-dividend, meaning new investors will miss out on the latest dividends.

In Germany, the DAX 30 index was slightly lower at 8,249.10, wavering around the all-time closing high reached on Wednesday.

Shares of Kloeckner & Co. SE added 2.4% in Frankfurt, after Citigroup lifted the steel trader to neutral from sell.

Portugal's PSI 20 index was up 0.2% at 6,276.22, even as data showed unemployment rose to 17.7% in the first quarter of 2013, up 2.8 percentage points from the same quarter last year and up 0.8 percentage points from the previous quarter.

Outside the major indexes, shares of SNAM SpA slumped 4.5%, after Italian energy company ENI SpA said it completed the stake of 11.7% of SNAM's share capital.

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