Bank of America Corp shares surged more than 7 percent on Thursday, outpacing other U.S. banks on a day of positive job news.

Shares of the second-largest U.S. bank climbed to $6.24 and outperformed other members of the KBW Bank Index, which was up 2.4 percent. The bank's shares are up nearly 12 percent this year after falling 58 percent in 2011.

The stock received a boost from job news that included a jump in hiring and a decline in jobless benefits claims, said Nancy Bush, a longtime bank analyst and contributing editor at SNL Financial.

What's good for America is good for Bank of America, she said.

Bush said it is also possible investors were anticipating positive mortgage-related news for the bank, such as a court settlement or an agreement with state attorneys general over foreclosure-related errors.

The Charlotte, North Carolina-based bank enters 2012 facing a number of significant challenges.

Like other big banks, it will undergo a Federal Reserve stress test to see if it has enough capital to withstand a severe economic downturn. Investors also want to know if the bank will receive regulatory permission to increase its dividend or buy back shares, while still building capital to meet new international requirements.

The 31 banks undergoing the stress test are required to submit their capital plans by Monday.

Bank of America also faces mounds of litigation related to soured mortgage loans packaged into securities during the housing boom. In a report on Thursday, Citigroup analyst Keith Horowitz said the bank could face up to $32 billion in additional losses tied to mortgages but called the amount manageable.

The wildcard for the stock remains how the regulators view this potential liability and how quickly they will require (Bank of America) to refill the capital hole, Horowitz wrote.

(Reporting By Rick Rothacker; editing by John Wallace)

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