LONDON_European stock markets rose Thursday after another batch of solid corporate earnings while better than expected U.S. jobs data pushed Wall Street futures higher.

Stocks in Europe bounced back after two days of losses, with the FTSE 100 index of leading British shares up 80.60 points, or 1.7 percent, at 4,727.73 and Germany's DAX 59.36 points, or 1.1 percent, higher at 5,412.37. The CAC-40 in France rose 45.27 points, or 1.3 percent, to 3,503.80.

Gains swelled as Wall Street futures headed higher as U.S. unemployment figures stoked hopes that Friday's key payrolls data will be better than expected. Dow futures were up 48 points, or 0.5 percent, at 9,293 while the broader Standard & Poor's 500 futures rose 4.9 points, or 0.5 percent, to 1,005.70.

The news that initial claims for jobless benefits in the U.S. dropped to a seasonally adjusted 550,000 for the week ending Aug. 1 from an upwardly revised figure of 588,000 in the previous hope helped fuel the buying after a couple of days when markets have been largely flat.

The hope is that the labor-market improvement will also be evident when the July nonfarm payrolls report is published Friday. The payrolls data often set the tone in the markets for a few weeks.

"With global property markets steadying, any indications of unemployment abating should drive the markets stronger," said Philip Gillet, sales trader at IG Index.

Earlier, there was a muted reaction to the confirmation from the European Central Bank and the Bank of England that they were keeping their benchmark interest rates unchanged at 1 percent and 0.5 percent respectively.

However, the news that the Bank of England decided to expand its asset purchase program by another 50 billion pounds to 175 billion pounds hit the pound hard, as currency traders trimmed back expectations about when the central bank would start to raise rates and withdraw monetary stimulus. The pound fell around a cent to $1.6878 following the news.

The decision to expand the program was somewhat of a surprise _ many economists thought the bank would suspend the program following signs that the British economy was on the mend.

Marc Ostwald, an analyst at Monument Securities, said the Bank of England has an increasing propensity to surprise the markets but probably decided it was important to avoid the Japanese experience of so-called quantitative easing in the 1990s and "do more rather than less."


Despite the Bank's decision, British stocks remained in demand, with financial stocks doing particularly well.

Royal Bank of Scotland Group PLC, which is majority-owned by the British government, was up nearly 12 percent ahead of Friday's half-year results, while Lloyds Banking Group PLC rose 11 percent for the second day running.

Insurer Aviva PLC was also heavily bought up, rising over 9 percent, after it posted better than expected first half results and announced plans to float off part of its Dutch subsidiary to shore up its capital base.

Elsewhere in Europe, Anglo-Dutch consumer products firm Unilever PLC/NV rose over 8 percent in London after reporting a second-quarter sales increase despite the global recession, while German reinsurer Hannover Re AG saw its share price rise near 7 percent after it revealed that second-quarter net profit doubled as demand increased for its products, particularly life and health reinsurance.

And in France, financial company Dexia SA topped the CAC's risers with a 10 percent advance as investors warmed to the general positive vibe surrounding bank and insurance companies across the continent.

Earlier in Asia, a bounceback in auto stocks, such as Honda Motor Co. and Toyota Motor Corp. helped Japan's Nikkei 225 stock average close 135.56 points, or 1.3 percent, higher at 10,388.09. Hong Kong's Hang Seng index recovered from early declines to gain 404.47, or 2 percent, to 20,899.24.

Bucking the trend were shares in China. The benchmark Shanghai Composite Index dropped 72.17 points, or 2.1 percent, to 3,356.33. Worries have grown over whether a surge in Chinese bank lending to support the government's massive stimulus Elsewhere, Australia's benchmark gained 1.5 percent after the unemployment rate held steady in July while South Korea's Kospi erased earlier losses and closed up 0.4 percent. Singapore's market fell 0.2 percent.

Oil prices continued to trade in a narrow range around $72 a barrel. Benchmark crude for September delivery was down 33 cents to $71.64 a barrel in electronic trading on the New York Mercantile Exchange.

The dollar rose 0.9 percent to 95.71 yen while the euro dipped 0.2 percent to $1.4380.

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AP Business Writer Kelly Olsen in Seoul contributed to this report.