GLOBAL MARKETS-Investors lean toward risk, US rates seen low

* MSCI world equity index up 1.6 percent

* U.S. data upholds economic recovery scenario

* Fed seen keeping low interest rate policy

* Gold hits record high; dollar under pressure

(Recasts with U.S. markets, updates indexes)

By Al Yoon

NEW YORK, Nov 4 (Reuters) - World stocks rose on Wednesday after upbeat European and U.S. economic reports, while the U.S. dollar slipped amid expectations the Federal Reserve will reaffirm its commitment to ultra-low interest rates.

Gold hit a record high, adding to momentum sparked by the International Monetary Fund's sale of bullion to India on Tuesday.

U.S. stock indexes jumped after a employee services company reported U.S. firms fired workers in October at the slowest pace in more than a year, raising chances job growth could reappear in early 2010. Click on [ID:nN04545735].

Gains extended after the Institute of Supply Management, a business group, in its monthly survey found activity in U.S. service businesses rose for a second straight month.

The Federal Reserve is expected to acknowledge a rise in economic activity as it completes its policy meeting later on Wednesday. But the Fed is also seen pledging to hold its target short-term interest rate exceptionally low for "an extended period" to provide a foundation for growth as unemployment remains high.

Analysts are also watching the Fed for signs of how fast it will unwind, or exit, emergency measures it used to boost borrowing and lower mortgage rates.

"The Fed is unlikely to offer any hints into the timing of an exit strategy and eventual rate rises, which may help stocks to rise and consequently boost (the euro)," said Antje Praefcke, currency strategist at Commerzbank in Frankfurt.

U.S. benchmark indexes rose, with the Dow Jones Industrial Average up 106.03 points, or 1.09 percent, to 9,877.94. The Standard & Poor's 500 Index climbed 9.48 points, or 0.91 percent, to 1,054.89 and the Nasdaq Composite Index gained 12.60 points, or 0.61 percent, to 2,069.92.

In Europe, a survey showed its dominant service sector expanded for the second consecutive month and at its fastest pace in 22 months. That was tempered by data showing Germany's service sector expanded at its slowest rate in three months.

Markit's final euro zone services purchasing managers' index of around 2,000 companies rose in October to 52.6, its highest reading since December 2007, up from 50.9 in September. It was revised up from forecasts and a flash reading of 52.3.