Stocks rose for a fourth straight session on Thursday after major central banks moved to boost European bank funding and regional leaders offered strong support for Greece, easing default fears.

The European Central Bank along with other major central banks will reintroduce three-month dollar liquidity operations in the fourth quarter.

The move was seen as good for the European banking system, which has experienced renewed stress in finding dollar funding due to growing distrust between lenders amid the region's sovereign debt crisis.

Financial stocks were among the top gainers, with the S&P financial sector index <.GSPF> up 0.8 percent. Among individual stocks, Bank of America Corp rose 2.1 percent to $7.21 and JPMorgan Chase & Co gained 1.5 percent to $33.29.

The move by the central banks offset weaker economic reports showing new weekly jobless claims hitting their highest level since late June and a gauge of New York state factory activity contracting in September.

Also, manufacturing activity in the U.S. Mid-Atlantic region contracted for a second month in a row.

The Dow Jones industrial average <.DJI> jumped 87.38 points, or 0.78 percent, at 11,334.11. The Standard & Poor's 500 Index <.SPX> was up 8.21 points, or 0.69 percent, at 1,196.89. The Nasdaq Composite Index <.IXIC> added 12.61 points, or 0.49 percent, at 2,585.16.

We are back up to the top of the trading range here. We've had a couple of good days in Europe. It seems to be where everyone's focus is. Nobody seems to care about domestic news, said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

I don't think this rally lasts. This European thing has so many more hoops to jump through, and there are going to be more stumbles.

On the downside, Switzerland's UBS AG U.S.-traded shares fell 10.4 percent to $11.36 after the bank said it discovered an unauthorized activity by a rogue trader that led to a loss of some $2 billion.

Widespread optimism came even as German Chancellor Angela Merkel rejected euro zone bonds as a solution to the currency area's debt crisis. A top official said he expects lenders to recommend the release of a vital next tranche of aid to Greece, warding off the threat of an imminent default.

(Reporting by Angela Moon; Additional reporting by Chuck Mikolajczak; Editing by Jeffrey Benkoe)

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