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World stocks up ahead of key US jobs data

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[September 03, 2010]  LONDON (AP) -- World stock markets rose Friday ahead of a U.S. jobs report that could help determine whether the Federal Reserve opts to introduce fresh measures to get the world's largest economy going again.

In Europe, the FTSE 100 index of leading British shares was up 26.92 points, or 0.5 percent, at 5,397.96 while Germany's DAX rose 29.04 points, or 0.5 percent, at 6,112.89. The CAC-40 in France was 23.18 points, or 0.6 percent, at 3,654.61.

Wall Street was poised for very modest gains later -- Dow futures were up 4 points at 10,313 while the broader Standard & Poor's 500 futures rose 1.1 point to 1,090.70.

How stocks end the week though will likely hinge on the monthly U.S. nonfarm payrolls data from the Labor Department, which are due an hour before Wall Street opens.

August's jobless rate is forecast to rise to 9.6 percent from 9.5 percent in July with the private sector adding only a net total of 41,000 jobs, the fewest since January.

Sentiment in the markets has improved over the last couple of days after a run of strong economic data from around the world, particularly out of the U.S. and that has helped shore up stocks.

"Today's U.S. jobs report is a test for the equity market bulls," said Neil MacKinnon, global macro strategist at VTB Capital.

The bulls certainly weren't in the ascendancy in August, when stocks fell sharply as doubts about the strength of the global recovery grew. A particularly weak U.S. jobs later could put the bears back in command and complicate policymaking at the Fed -- the payrolls data often set the stock market tone for a week or two after their release.

The central bank's chairman Ben Bernanke has indicated that the Fed could introduce additional stimulus measures if the U.S. economy weakens.

Trading later could well be complicated by the fact that the U.S. is about to enjoy a long weekend, with Labor Day -- the traditional end of the summer lull on Wall Street -- on Monday.

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Yusuf Heusen, a senior sales trader at IG Index, said Wednesdays' stock market gains in the wake of a particularly upbeat manufacturing survey from the Institute for Supply Management remain intact but that "the long weekend that's coming up in the U.S. could see traders taking money off the table in the next few hours regardless of that employment reading from Washington."

The jobs data will be closely monitored in currency markets too where trading has been fairly subdued over the last couple of days -- by late morning London time, the dollar was up 0.2 percent at 84.46 yen while the euro was 0.1 percent firmer at $1.2841.

Earlier in Asia, Japan's benchmark Nikkei 225 stock index rose 51.29 points, or 0.6 percent, to 9,114.13 and South Korea's Kospi edged up 0.2 percent to 1,780.02. Hong Kong's Hang Seng index added 0.5 percent to 20,971.50.

China's benchmark Shanghai Composite Index closed flat at 2,655.39, though tech stocks surged on a government announcement of plans to support development of clean energy and other fields.

Australia's S&P/ASX 200 gained 0.2 percent to 4,541.20.

Benchmark oil for October delivery was down 31 cents at $74.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.11 to settle at $75.02 a barrel on Thursday.

[Associated Press; By PAN PYLAS]

AP Business Writer Joe McDonald in Beijing contributed to this report.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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