Wall Street rose on Thursday, led by banks and home builders after European lenders decided to continue a liquidity safety net for vulnerable banks and pending home sales data showed an unexpected jump in October.

The KBW bank index <.BKX> shot up 2.9 percent, the biggest one-day gain in a month. The S&P 500 financial index <.GSPF> rose 2.2 percent, making it the largest gainer among S&P sectors.

The stock market was reassured by the European Central Bank's commitment that its liquidity safety net for vulnerable euro-zone banks will continue.

Officials have basically said we will do what it takes and while you can never know what a Band-Aid will look like at any point in time, I think the overall theme is that those Band-Aids will be found, said Bob Doll, chief equity strategist for fundamental equities at BlackRock Inc .

Further supporting the financials, Goldman Sachs Group Inc said U.S. banks are on stronger footing due to an improving economy, higher equity prices and a favorable interest-rate environment.

Shares of regional lender Marshall & Ilsley Corp jumped 7.2 percent to $5.23 and Bank of America gained 2.7 percent to $11.59.

Home builders' stocks also rose as an index of pending home sales unexpectedly surged in October, hinting the economic recovery has legs. The Dow Jones U.S. Home Construction index <.DJUSHB> advanced 4.3 percent.

The Dow Jones industrial average <.DJI> rose 102.74 points, or 0.91 percent, to 11,358.52. The Standard & Poor's 500 Index <.SPX> advanced 13.29 points, or 1.10 percent, to 1,219.36. The Nasdaq Composite Index <.IXIC> gained 24.28 points, or 0.95 percent, to 2,573.71.

Other data showed U.S. retailers reported higher-than-forecast sales for November, while the four-week moving average for jobless claims fell to a fresh two-year low, though new claims rose for the week.

The Dow and the S&P 500 scored their biggest one-day percentage gains in three months on Wednesday as optimism about efforts to resolve the EU's debt crisis helped push the S&P above 1,200.

If the S&P 500 continues to hold above that level, the market uptrend will see strong resistance at 1,225-1,230, which coincides with a recent two-year high and the 61.8 percent Fibonacci retracement of the benchmark's slide from October 2007 to March 2009, a key technical indicator.

In company news, PepsiCo Inc
agreed to buy Russian juice and dairy producer Wimm-Bill-Dann . U.S.-traded shares of Wimm-Bill-Dann surged 27.3 percent to $31.15. In contrast, Pepsico's stock lost 0.9 percent to $65.03.

(Reporting by Angela Moon; Additional reporting by Ed Krudy; Editing by Jan Paschal)