World Markets Advance Amid Heightened Volatility

An investor reacts in front of a stock price monitor at a private securities company Wednesday, Dec....

An investor reacts in front of a stock price monitor at a private securities company Wednesday, Dec. 3, 2008 in Shanghai, China. Chinese stocks rose in active trading Wednesday after Wall Street gained overnight and a government fund announced a large purchase of shares in a major state-owned commercial bank. The benchmark Shanghai Composite Index rebounded 4.01 percent, or 75.78 points, to close at 1965.41.

(Eugene Hoshiko/AP Photo)

World stock markets rose Wednesday as investors brushed aside further dismal economic news ahead of key interest-rate decisions in Europe and the closely watched U.S. jobs report for November.

Late buying helped the FTSE 100 index of leading British shares to close up 47.10 points, or 1.1 percent, at 4,169.96, while Germany's DAX was 35.45 points, or 0.8 percent, higher at 4,567.24. The CAC-40 in France was up 13.75 points, or 0.4 percent, at 3,166.65.

Meanwhile, on Wall Street, the Dow Jones industrial average finished up 172.60, or 2.1 percent, at 8,591.61. The Dow has gained more than 442 points in the past two sessions, recouping more than half of Monday's nearly 680 point slide.

"Financial markets are expected to remain volatile for some time, as they take on board two sets of issues, the credit crisis and the economic crisis," said Andrew Milligan, head of global strategy at Standard Life Investments.

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A raft of data on the services sector Wednesday reinforced investor concerns about the U.S. and European economies.

In the U.S., the Institute for Supply Management, a trade group of purchasing executives, said the services sector contracted dramatically in November as slower spending hurt insurers, retailers and hotels. It said its services sector index fell to 37.3 in November from 44.4 in October.

The reading was significantly lower than the 42 the market expected and means that the sector is in a deep recession. A reading below 50 indicates contraction and the lower the number, the greater the contraction.

"The steep drop in services industry activity in November is another sobering reminder of the potentially devastating consequences of the current long and painful recession," said IHS Global Insight's chief U.S. financial economist, Brian Bethune.

As a result, a number of analysts have lowered their expectations for Friday's U.S. non-farm payrolls data, with some now projecting that around 350,000 jobs were lost in November. The consensus is that around 325,000 jobs were shed during the month.