World markets pushed higher Wednesday as investors cheered the latest batch of Greek budget cuts as well as upbeat U.S. economic surveys on the jobs market and services sector.
In Europe, the FTSE 100 index of leading British shares closed up 49.15 points, or 0.9 percent, at 5,533.21 while Germany's DAX rose 41.32 points, or 0.7 percent, to 5,817.88. The CAC-40 in France was 30.60 points, or 0.8 percent, higher at 3,842.52.
On Wall Street, the Dow Jones industrial average was up 46.70 points, or 0.5 percent, at 10,452.68 around midday New York time while the broader Standard&Poor's 500 index rose 6.03 points, or 0.5 percent, to 1,124.34.
Markets had been trading on a steady tone all day amid hopes of a solution to Greece's financial crisis after the government unveiled more harsh measures — worth 4.8 billion ($6.5 billion) — to bring down its borrowing levels.
Prime Minister George Papandreou said the measures were "not taken out of choice but out of necessity" and "were necessary for the survival of our country and our economy, and for Greece to escape the whirlwind of speculators."
The new austerity package comes after European Union officials bluntly told Athens to make deeper spending cuts. Ratings agencies have also warned of more damaging downgrades if Greece is unable to rein in its debt.
The threat of an imminent credit ratings downgrade appears to have receded after both Moody's Investor Services and Fitch Ratings gave a broadly supportive response to the budget measures. Standard&Poor's had not yet commented.
And in the bond markets, the spread between Greek and German ten-year bond yields remains around 2.8 percentage points, which though elevated is still way down from the levels seen for much of 2010. The smaller the spread, the greater the confidence in Greek debt.
Analysts said Greece now had a window to launch a bond issue over the coming days as it tries to rollover its debt mountain — most think it will seek around euro5 billion.
"This would obviously help to ease Greece's near-term cash problems but with some euro20 billion of debt maturing in April and May, the government will need to raise much more from the markets over the coming months," said Ben May, European economist at Capital Economics.
"And for that, firmer pledges of support from other eurozone countries are still likely to be required," said May.
All eyes then on Friday's meeting between Papandreou and German Chancellor Angela Merkel to see if any further EU support is provided to Greece.
Jane Foley, research director at Forex.com, said the continued fall in Greek bond yields this week is "a sign that the market believes that the EU has little option but to ensure that Greece is not forced to default on its debt."
Though a prospective bailout alongside the more savage budgetary cuts have brought some calm to the markets, there are clear question-marks about the government's ability to push through the measures.
"The proof of the pudding is in the eating; there is still a very long way to go before Greece's budget deficit is anyway near the 3 percent of GDP limit outlined in the Maastricht Treaty, thus neither Greece nor the euro is out of the woods yet," said Foley.
The euro enjoyed a big advance in the wake of the Greek budget cuts announcement and the cautious optimism of both Moody's and Fitch, rising 0.8 percent to $1.3728.
Optimism in the markets was further buoyed by an encouraging batch of U.S. economic jobs data.
The ADP payrolls firm reported that the decline in private sector employment in the U.S. slowed to 20,000 in February from 60,000 the previous month.
The figures came ahead of Friday's government nonfarm payrolls report, which often sets the market tone for a while.
"Wall Street made an optimistic start to the day, rising on the back of employment data showing lower-than-expected job losses," said David Jones, chief market strategist at IG Index.
Further encouragement came with a survey showing that the U.S. service sector grew by more than anticipated in February and by its fastest rate in more than two years.
The Institute for Supply Management said its index measuring service industries rose to 53 in February from 50.5 in January. The increase was more than anticipated — the consensus in the markets was for a far more modest rise to 51. Any reading above 50 indicates expansion.
Earlier in Asia, Japan's Nikkei 225 stock average edged up 31.30 points, or 0.3 percent, to 10,253.14.
South Korea's Kospi was up 0.5 percent at 1,622.44 but Hong Kong's Hang Seng lost 0.1 percent to 20,876.79.
Elsewhere, Australia's market rose 0.7 percent, lifted by news the local economy grew at its fastest pace in nearly two years, signaling that the country has emerged from the worst of the global crisis.
Shanghai's market was 0.8 percent higher.
Benchmark crude for April delivery was up $1.50 to $81.18 a barrel.
___
AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.
