European equities fell around 0.5 percent in early trade .STOXX50E and stocks also sold off in Asia .MIAPJ0000PUS, dented by weak Chinese data and disappointment over the extent of stimulus announced by the U.S. Federal Reserve.

The Federal Reserve on Wednesday delivered another round of monetary stimulus and said it was ready to do even more to help a U.S. economic recovery that looks increasingly fragile, but stopped short of announcing a third round of quantitative easing which some investors had been hoping for.

Stocks edged lower after the Fed's announcement on Wednesday. The Dow Jones industrial average .DJI ended down 12.94 points, or 0.10 percent, at 12,824.39. The Standard & Poor's 500 Index .SPX fell 2.29 points, or 0.17 percent, to 1,355.69. The Nasdaq Composite Index .IXIC, however, gained 0.69 point, or 0.02 percent, to 2,930.45.

Wall Street's top bond firms still see a 50 percent chance of more QE.

China's factory sector contracted for an eighth straight month in June, with export orders and prices turning in their weakest showing since early 2009, the HSBC Flash Purchasing Managers Index, which tracks activity in the private sector, showed on Thursday.

The euro zone crisis remains in the spotlight, with Spain's borrowing costs expected to hit a new euro era high at a debt auction on Thursday, a few hours before Madrid sheds light on the dire state of its weaker banks and possibly makes a formal request for European Union funds to rescue them.

Diary highlights include existing home sales for May and the Philly Fed index of factory activity in the U.S. mid-Atlantic region for June, both due at 1400 GMT.

ConAgra Foods, Carnival Corp and Apollo Group (APOL.O) are among companies reporting results.

Johnson & Johnson (JNJ.N) is close to reaching a settlement with the U.S. Justice Department over allegations it promoted anti psychotic drug Risperdal for unapproved uses that could cost the healthcare conglomerate at least $1.5 billion, the Wall Street Journal reported on Wednesday.

A judge on Wednesday strongly questioned Apple's (AAPL.O) bid for an injunction against Google's (GOOG.O) Motorola Mobility unit, as the iPhone maker tries to salvage its position on a key front in the smartphone patent wars.

Wells Fargo & Co (WFC.N), the fourth-largest U.S. bank by assets, is looking to move some jobs outside the United States as it pushes forward with a company-wide cost-cutting program.

(Reporting By Toni Vorobyova; Editing by Susan Fenton)

• A Permanent Economic Emergency