European and U.S. stock markets pared gains Thursday after a downbeat U.S. services sector survey stoked concerns about the recovery in the world's largest economy just a day before a key jobs report.

In Europe, the FTSE 100 index of leading British shares closed down 14.39 points, or 0.3 percent, at 5,313 while Germany's DAX fell 11.33 points, or 0.2 percent, to 5,770.35. The CAC-40 in France was up 3.19 points, or 0.1 percent, at 3,799.11.

On Wall Street, the Dow Jones industrial average was up 5.67 points, or 0.1 percent, at 10.458.35 around midday New York time while the broader Standard & Poor's 500 rose 1.35 point, or 0.1 percent, to 1,110.59.

Stocks had been trading higher throughout the day after big gains in Asia _ led by Japan's Nikkei _ as investors continued to warm to Wednesday's news that Bank of America Corp. will repay $45 billion of government bailout money. A fifth straight weekly decline in U.S. jobless claims added to the positive tone.

However, that optimism waned after a closely watched survey indicated that the services sector in the U.S. was falling back into recession. The Institute for Supply Management said its service industry index fell to 48.7 in November from 50.6 in October. The fall was unexpected _ analysts were expecting a rise to 51.5 _ and signaled renewed contraction in the sector as any reading below 50 does.

The data comes as investors turn their attention to Friday's U.S. nonfarm payrolls report for November _ data that often sets the tone in the markets for a week or two.

If investors conclude the U.S. economy is losing steam, that could pave the way for a bout of profit-taking following an eight-month bull run.

The consensus is that November U.S. non-farm payrolls fell by around 120,000, but that the unemployment rate held steady at a 26-year high of 10.2 percent.

"A slightly worse number than this could well provide the excuse to bank some of this week's profits ahead of the weekend," said Philip Gillett, sales trader at IG Index.

The news that the European Central Bank kept its benchmark interest rate unchanged at a historic low of 1 percent and will start withdrawing some of its extraordinary liquidity support had little market impact.

Sentiment had mainly been buoyed by the news that Bank of America intends to repay money it received during the height of the credit crisis last year and after its purchase of Merrill Lynch earlier this year to escape the heightened government supervision that goes along with it.