LONDON (AP) - Stocks in Europe and on Wall Street rebounded yesterday as a bigger than anticipated fall in weekly US jobless claims helped boost investor sentiment following days of negative news related to Europe's debt crisis.

The improvement in markets also helped the euro recoup some recent lost ground - when investors have a greater appetite for risk, stocks usually get a boost, while the dollar loses some of its safe haven shine.

In Europe, the FTSE 100 index of leading British shares closed up 75.82 points, or 1.4 percent, at 5,657.1 while Germany's DAX surged 118.80 points, or 1.8 percent, to 6,823.8. The CAC-40 in France ended 23.19 points, or 0.6 percent, higher at 3,747.61.

In the US, the Dow Jones industrial average was up 128.43 points, or 1.2 percent, at 11,164.8 around midday New York time, while the broader Standard & Poor's 500 index rose 14.90 points, or 1.3 percent, to 1,195.63.

Stocks took a hit on Tuesday on news of the exchange of artillery between North Korea and South Korea and mounting worries that Europe's debt crisis was headed for Portugal and even Spain.

Though contagion worries lingered, sentiment was shored up by a generally positive batch of US economic reports. Data showed that US jobless claims last week fell by 34,000 to 407,000, their lowest level since July 2008. The fall was far larger than anticipated.

An improving jobs situation is crucial if the US economy is going to start growing more quickly.

That will help shore up the global economic recovery at a time when Chinese growth is expecting to come off the boil.

Today, the market focus will likely remain on Europe's debt crisis, especially as US markets will be closed for the Thanksgiving break.

Earlier in Asia, investors had their first real opportunity to respond to the artillery clash between North and South Korea Tuesday.

Though South Korea's financial markets opened 2.4 percent lower the Kospi ended down only 0.2 percent at 1,925.98.

Japan's Nikkei 225 stock average fell 0.8 percent and Hong Kong's Hang Seng index finished up 0.6 percent. Chinese shares rebounded in active trading, with the benchmark Shanghai Composite Index gaining 1.1 percent.

The rebound in stock markets helped oil prices, too, with benchmark crude for January delivery up $1.73 to $82.98 a barrel in electronic trading on the New York Mercantile Exchange.