U.S. stocks are poised to start the year with a third straight day of gains as encouraging data from the labor market and service sector point to a firming economic recovery.

The Dow Jones Industrial Average was 42 points, or 0.4%, higher at 11733 after trading in negative territory Wednesday morning.

The Standard & Poor's 500 stock index was up six points at 1276, while the Nasdaq Composite advanced 15 points to 2696.

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Helping the advancers was Walt Disney Corp. (DIS), which gained 2.1% after Goldman Sachs added the company to its conviction buy list, citing an expected growth rebound in the company's parks division.

Financials led the way, however, boosted by hopes of an improving economic environment.

Bank of America (BAC) rose 1.6%, J.P. Morgan Chase (JPM) added 1.1%, and American Express (AXP) advanced 2.8% to lead the Dow components. Pulling on the downside were utilities stocks.

Intel Corp. (INTC) and Microsoft Corp. (MSFT) fell 0.9% and 0.7% respectively to lead the Dow's decliners. Investors found reasons to cheer after a pair of unexpectedly strong readings on jobs and services.

One closely watched jobs report showed private-sector employment increasing by 297,000 in December from the previous month, triple the consensus expectation for 100,000 new jobs.

The number was the biggest monthly increase in the survey's history, with the growth coming almost exclusively from the services sector.

Also on the economic front, the ISM non-manufacturing index turned in a December reading of 57.1, its highest showing since 2006 and topping consensus expectations of a 55.6 reading.

However, that report showed a decline in the employment reading, off a three year high last month.

European Markets

European equities finished nearly flat Wednesday, erasing an earlier slide as pressure on commodity firms and banks was offset by stronger than expected U.S. economic data.

The Stoxx Europe 600 index ended the day virtually unchanged, rising 0.10 point, or 0.04%, to close at 280.48.

Pressure on European stocks eased as Wall Street turned higher in the wake of stronger than expected data showing U.S. private sector payroll growth.

A gauge of service sector activity also beat expectations. Spanish stocks were under the most pressure Wednesday.

A Markit Spain Services PMI survey reported business activity decreased at its fastest pace in 12 months during December, with new business down for a sixth month.

Shares of BBVA SA fell 1.3%, with the banking heavyweight dragging the Spanish IBEX 35 index down 0.9%.

Also on the periphery, the Portugal PSI 20 index dropped 0.7% to 7,728.42.

Stocks moving to the downside included heavily weighted Galp Energia SGPS SA, which fell 1.4%; Portugal Telecom SGPS SA, down 2%, and retailer Jeronimo Martins SGPS SA, which lost 2%.

The German DAX 30 index fell 0.5% to close at 6,939.82, with shares of Heidelberg Cement AG losing 3.4% and auto group Volkswagen AG declining 2.6%.

Retailer Metro AG fell 4.1% in a sector that was particularly weak across Europe. In Paris, the CAC 40 index fell 0.3% to close at 3,904.61.

Shares of Carrefour SA lost 1%, while luxury-goods retailer LVMH Moet Hennessy Louis Vuitton SA dropped 1.4%.

In London, the FTSE 100 index bucked the weaker trend on the continent to end with a 0.5% rise to 6,043.86, with banks leading gains in the wake of the U.S. data.

HSBC Holding rose 3.1% and Barclays PLC added 3%.

Shares of technology firm ARM Holdings rallied 7.7% on media reports of a possible takeover bid by Intel Corp.

Asian Markets

Asian stock markets were mostly lower Wednesday, with resource stocks losing ground due to weakness in gold and oil prices Tuesday.

Japan's Nikkei Stock Average fell 0.2% and South Korea's Kospi ended down 0.1%

China's Shanghai Composite fell 0.5% and Taiwan's Taiex fell 1.7%.

Hong Kong was among the few gainers, with the Hang Seng Index adding 0.4% for its sixth straight positive session.

Resources plays around the region lost ground.

Inpex fell 0.4% and Sumitomo Metal Mining was off 1.8% in Japan.

Zijin Mining's Hong Kong shares slid 1.1% and its Shanghai shares lost 2.9%.

In Japan, smartphone related stocks dominated otherwise lackluster market action.

Sharp ended up 3.0% after a Nikkei report that idled LCD production lines at two factories had resumed operations.

Base Metals

Base metals pared their early losses on the London Metal Exchange Wednesday after a strong private sector jobs report eased concerns over the U.S. economic recovery.

The better than expected ADP report, which is seen as a precursor to the closely watched nonfarm payroll figures, due for release Friday, triumphed over a stronger U.S. currency to drive the metals off their early lows and back toward positive territory.

LME three month copper closed the day at $9,550 a metric ton, down just 0.3% on Tuesday's PM kerb close, after having earlier hit an intraday low $9,367/ton, down 2.3% on the day.>The red metal had rebounded further, to trade at $9,606/ton.

News that Ivernia Inc. (IVW.T) has declared force majeure on deliveries to customers of its Magellan lead mine meanwhile helped to push lead prices higher on the day, traders said.

Oil prices rose Wednesday, reversing course midday, as equities markets turned higher.

Light, sweet crude for February delivery settled 92 cents higher at $90.30 a barrel on the New York Mercantile Exchange.

Crude began the day lower and continued to sink through mid-morning in New York following a U.S. government's report showing fuel inventories rose more than expected last week.

Nymex crude hit an intraday low of $88.10 before rallying above $90 a barrel on the back of a stock market rally.

Gold futures fell as robust jobs data caused investors to prefer equities and industrial commodities to the refuge of the precious metal.

The most actively traded gold contract, for February delivery, fell $5.10, or 0.4%, to settle at $1,373.70 a troy ounce on the Comex division of the New York Mercantile Exchange.

The thinly traded nearby January contract also lost $5.10, to $1,373.40.