Wall Street shares recorded their strongest gains in three weeks as new economic data raised expectations of lower interest rates, while at the same time providing hope that the economy would avoid recession.

The rally followed the release of the US Labour Department's monthly jobs report, which was revealed a day ahead of schedule after some of the figures were accidentally published on a government Internet site.

The Dow Jones close 132 points higher, or 1.5%, at 8,915.

Elsewhere, market volatility appeared to have resurfaced as prices in London and elsewhere plunged just a day after recording hefty gains.

More than £25bn was wiped off London stocks as leading shares had one of their worst days of the year.

The FTSE 100 index of leading shares slumped almost 3%, or 143 points, to 5479.

The fall came despite the Bank of England's decision to slash UK interest rates by 0.5% to 6.75% in an effort to revive the UK economy and help stave off a recession.

Markets elsewhere around the world also took a tumble as worries about the global economic recession resurfaced.

Taking profits

Dealers said there was an element of profit-taking as investors cashed in on recent strength in share prices.

Leading shares in Germany fell more than 2%, while France's main stock index slipped 1.76%.

The fresh falls come in the wake of a disappointing performance on the Asian stockmarkets, with shares in Hong Kong and Japan suffering heavy losses.

Dealers remain nervous about the economic turmoil that has ravaged Russia, Asia and Latin America.

Some believe the recent recovery in global share prices could have come to an end.