* Global stocks, Brent buoyed by steps to safeguard banks
* U.S. private sector jobs report also lifts optimism
* Euro falls vs dollar on doubts about Greek progress
* Euro zone private sector activity contracts, a bad sign (Adds fresh prices, quotes)
By Herbert Lash
NEW YORK, Oct 5 (Reuters) - Global stocks and oil prices rebounded on Wednesday on hopeful signs that authorities are moving forward to prop up Europe's ailing banking sector and after reassuring U.S. economic data
European finance ministers meeting in Luxembourg late on Tuesday agreed to examine a way to beef up banks' balance sheets and prevent a full-blown financial crisis. For details see: [ID:nL5E7L51RH] [ID:nL3E7L42VF]
Risk aversion eased further after better-than-expected data on the U.S. services sector and private sector business activity helped offset concerns about the Greek debt crisis and data in Europe that suggested the region is sliding into recession.
European stocks gained more than 3 percent, pushed higher by banking shares, and Brent crude bounced more than 2 percent to top $102 a barrel.
European shares rose after tumbling nearly 5 percent the past three sessions. The benchmark S&P 500 index in the United States had fallen 10 percent over the past six sessions, but had staged a sharp rebound late on Tuesday after earlier marking a fall into bear territory.
The FTSEurofirst 300 <.FTEU3> index of top European shares provisionally closed up 3.1 percent at 915.19 points. MSCI's all-country world index <.MIWD00000PU> rose 1.3 percent to 275.51.
"The market is getting a little more confident that policy makers are more serious about tackling the problems," said Richard Batty, strategist at Standard Life Investments, which has $245 billion of assets under management.
Batty added although it was "helpful to see a road map" that could give investors a clearer expectation of what might be ahead, he was skeptical until he saw a "concrete plan in place."
Shares of Belgian-French financial group Dexia
Brent crude
Surveys that showed private sector business activity shrank in the euro zone for the first time in two years last month as new orders dried up kept enthusiasm among many investors in check.
Charles Lieberman, chief investment officer of Advisers Capital Management, LLC in Hasbrouck Heights, New Jersey, said valuations suggest U.S. stocks, which are trading at 10.4 times forward earnings, are cheap. But Europe is still a concern.
"There remain questions about how it will all be resolved, and it is by no means certain that the resolution will come in a responsible way that won't cause market turmoil," he said.
The Dow Jones industrial average <.DJI> was up 47.34 points, or 0.44 percent, at 10,856.05. The Standard & Poor's 500 Index <.SPX> was up 6.58 points, or 0.59 percent, at 1,130.53. The Nasdaq Composite Index <.IXIC> was up 27.03 points, or 1.12 percent, at 2,431.85.
The Institute for Supply Management said its services index dipped to 53.0 last month from 53.3 in August but employment in the vast U.S. services sector fell in September to its lowest level since April 2010.
"Beneath the surface, it's actually a fairly mixed report," said Tom Porcelli, chief economist at RBC Capital Markets in New York.
The dollar extended gains versus the yen to hit a session peak, and the euro fell, weighed by nagging worries over a Greek default even after a pledge by policy-makers to strengthen European banks. [ID:nN1E7940BT]
A downgrade of Italian sovereign debt by ratings agency
Moody's highlighted the funding difficulties facing the euro
zone's third-biggest economy. France and Belgium were forced to
help Dexia SA
"Slightly better employment data would signal risk preference but a lack of progress in any meaningful way on resolving Greece and the debt crisis in general is keeping risk at bay," said John McCarthy, director of foreign exchange at ING Capital Markets in New York. "A downgrade of Italy has brought everyone back to reality."
U.S. Treasury debt prices slid as investors pared safe-haven holdings after the International Monetary Fund said it may invest in European bonds and as traders bet on more stimulus from the U.S. Federal Reserve. [ID:nN1E7940LC]
The IMF could invest in Spanish or Italian bonds in the secondary or primary market alongside the euro zone bailout fund, if needed, to help boost investor confidence in the debt, the IMF's Europe head, Antonio Borges, said. [ID:nP6E7KG01I]
The euro
The prices of U.S. Treasury securities fell, with yields nearing session highs after the report on U.S. private sector jobs showed more job growth than expected in September.
Benchmark 10-year Treasury notes