Optimism in the US Service Sector is good news for the Markets

The vast U.S. services sector expanded again last month, extending a three-year run of growth, while European business optimism hit an eight-month high, suggesting the euro zone economy was starting to recover.

Rising corporate confidence also helped China's services sector grow at its quickest pace in four months, providing more evidence of a gradual rebound in the world's second largest economy. 

The data on Tuesday bolstered the view that things were looking up for the world economy, a sentiment that has lifted stock markets around the globe and pushed the U.S. benchmark S&P 500 to five-year highs.

While the Institute for Supply Management's service sector index eased slightly in January, it still showed the sector continued to grow for a third straight year.

A report from data analysis firm CoreLogic said U.S. home prices rose for a 10th straight month in December, with the year-on-year jump the biggest since May 2006.