U.S. stocks climbed Thursday, extending the market's strong start to the month as better than expected chain store sales and pending home sales painted a brighter picture of the U.S. economy. Also helping stocks, pressure on the euro eased on talk that the European Central Bank was actively buying more bonds of some of the bloc's more financially stressed governments.

The Dow Jones Industrial Average was up 92 points, or 0.8%, at 11348 in midday trade. Bank of America and J.P. Morgan Chase were among the Dow's strongest components after Goldman Sachs lifted its view on the financial sector to overweight, marking the first time the firm has been positive on financials since 2008. Bank of America climbed 2.8% and J.P. Morgan added 2.4%.

The Nasdaq Composite rose 0.9% to 2572. The Standard & Poor's 500 share index gained 1% to 1218, led by its financials and industrials sectors. Boosting sentiment for the holiday shopping season, sales at retail stores opened more than a year rose 6% in November, above the estimated growth of 3.6% and the year ago gain of 0.6%, according to Thomson Reuters. Shares of Abercrombie surged 11% after the teen retailer posted a 22% jump in its November same store sales.

Other retailers that climbed on better than expected sales included J.C. Penney, up 2.5%, and Costco Wholesale, up 0.9%. Investors were also encouraged by the National Association of Realtors' pending home sales index, which unexpectedly soared 10.4% to 89.3. The report boosted home improvement retailers and home builders. Lowe's climbed 3.9%, Home Depot rose 3.8%, Lennar gained 6.8% and PulteGroup added 4.1%.

European markets

European stocks rose for a second straight session Thursday as the European Central Bank said it would delay the withdrawal of emergency liquidity, though it stopped short of announcing more aggressive measures. The Stoxx Europe 600 index, which gained 2% in the previous session, closed up 1.7% at 271.61. The benchmark dipped in and out of positive territory while ECB President Jean Claude Trichet spoke but the gains accelerated after the press conference ended.

Strong retail sales and real-estate data out of the U.S. also helped. Of the main regional indices, France's CAC 40 rose 2.1% to 3,747.04, the U.K.'s FTSE 100 surged 2.2% to 5,767.56 and Germany's DAX 30 advanced 1.3% to 6,957.61. Among peripheral indices, Spain's IBEX 35 rose 2.8%, extending Wednesday's 4.4% gain. The financial sector was in the green again. In Madrid, shares of Banco Santander rallied 5.1% and those of BBVA rose 4.2%. Shares of UBS AG gained 2.9% in Zurich, while Deutsche Bank AG rose 2.8% in Frankfurt.

Asian markets

Asian markets ended higher Thursday as Wednesday's surge on Wall Street and in commodity prices lifted metal and mining stocks, while exporters extended gains to send Japanese shares to their highest finish in more than five months. The Nikkei Stock Average rose 1.8% to end at 10,168.52, its highest close since June 21, South Korea's Kospi rose 1.1%, Hong Kong's Hang Sang Index tacked on 0.9% and China's Shanghai Composite advanced 0.7%.

Wednesday's strong U.S. and global manufacturing data, including an improved U.S. private sector ADP jobs report and solid manufacturing activity in China, buoyed sentiment. In Japan, signs of a recovery in U.S. employment spurred shares to advance sharply from the outset. Among exporters, Advantest closed up 5.4% and Canon rose 2.5%, helped by yen weakness against both the dollar and the euro. Some auto plays got a boost from November U.S. new-vehicle sales.

Honda Motor rose 1.8% and Nissan Motor jumped 3.1%. In South Korea, Kia Motors rose 1.8%, after the auto maker said its November sales in the U.S. rose 48% from the same period a year earlier. Mining and other resource stocks broadly rose across the region, with Inpex Corp. rising 1.2% in Tokyo and Cnooc climbing 3.2% in Hong Kong. Jiangxi Copper's Hong Kong listed shares added 3.7% and its Shanghai ones tacked on 2.1%.

Base metals

Base metals closed higher on the London Metal Exchange Thursday after strong U.S. home sales data and a rebound in the euro. LME three month copper ended the day up 1.6% as riskier assets rallied on improving investor sentiment. In the U.S., the National Association of Realtors' index for pending sales of existing homes increased 10.4% to 89.3, raising hopes for increased future demand for the red metal, which is used widely in construction. LME listed copper stocks fell 2,425 metric tons Wednesday, to a fresh 13 month low of 352,425 tons.

The emergence of a dominant long position by one trader has also led to tightness in the nearby spreads, with the metal having moved into its deepest backwardation since October 2008. A backwardation occurs when nearby prices are at a premium to forward prices. Crude futures moved higher Thursday, followed rising equities as traders grow more optimistic about strength in the broader economy. Light, sweet crude for January delivery settled $1.25 higher at a two year high of $88 a barrel on the New York Mercantile Exchange. Oil prices gained momentum from rising equities markets and improving economic data.

U.S. initial unemployment claims climbed by 26,000 to 436,000 last week, the Labor Department said Thursday. While the rise was larger than expected, the four week moving average, which aims to smooth out fluctuations in the data, fell to the lowest level in more than two years. Gold prices flirted with the $1,400 mark but settled with modest gains as positive news from Europe boosted investor appetite for risk. The most actively traded contract, for February delivery, settled up 0.2%, or 41, at $1,389.30 a troy ounce on the Comex division of the New York Mercantile Exchange.

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