Payroll worries end Wall Street's four-day rally

Wall Street's four-day rally ground to a halt on Thursday, with major indexes falling 1 percent on caution ahead of a key labour market report expected to underscore fears the economy is headed for another recession.

The Dow Jones industrial average was down 119.96 points, or 1.03 percent, at 11,493.57. The Standard & Poor's 500 Index was down 14.47 points, or 1.19 percent, at 1,204.42. The Nasdaq Composite Index was down 33.42 points, or 1.30 percent, at 2,546.04.

European share prices rose led by defensive sectors, with investors encouraged by data showing US factory activity cooling in August but still expanding.

The FTSEurofirst 300 index of top European shares ended 0.7 percent higher at 973.39 points, gaining ground for the seventh time in nine sessions.

Japan's Nikkei average rose to clear 9,000 for the first time in two weeks, helped by expectations of more easing by the Federal Reserve and Chinese data, but further gains are seen limited ahead of US economic figures.

The benchmark Nikkei climbed 1.2 percent to 9,060.80 on the first trading day in September after it shed 8.9 percent last month, when equities markets worldwide were battered by the US credit ceiling saga, worries that the United States was slipping back into recession and the euro-zone debt crisis. The broader Topix index gained 1.0 percent to 778.28.