* U.S. manufacturing grows more than expected
* Pending home sales surge in September
* Ford posts profit, shares jump
* Dow up 1.2 pct, S&P up 1.1 pct, Nasdaq up 0.8 pct (Updates to midday, changes byline)
By Leah Schnurr
NEW YORK, Nov 2 (Reuters) - U.S. stocks rose on Monday as stronger-than-expected data on manufacturing and pending home sales spurred broad-based gains following a sell-off at the end of last week.
Manufacturing activity rose to its highest level in 3-1/2 years last month, while pending home sales contracts staged a surprising surge in September, data showed, helping to soothe the recovery jitters that hit the market on Friday.
"The data was very much on the better side of expectations," said Nick Kalivas, vice president of financial research & senior equity index analyst at MF Global in Chicago.
The National Association of Realtors said its pending home sales index rose to the highest level in nearly three years ahead of the expiration of a popular federal tax credit for first-time home buyers.
"The pending home sales being up 6 percent was pretty shocking ... it appears people looking for bargains on foreclosures is continuing and that's helping clear out the housing market slowly but surely."
Earlier data showed euro-zone factory activity expanded for the first time in 17 months and picked up in Britain and China, suggesting a global economic recovery is under way.
Ford Motor Co shares jumped 9.1 percent to $7.64 after the U.S. auto maker posted a surprising quarterly profit on cost cuts, improved credit results and increased market share.
The Dow Jones industrial average gained 119.79 points, or 1.23 percent, to 9,832.52. The Standard & Poor's 500 Index <.SPX> rose 11.60 points, or 1.12 percent, to 1,047.79. The Nasdaq Composite Index added 15.82 points, or 0.77 percent, to 2,060.93.
Financials, materials and energy shares led the way up as indexes recouped some of Friday's losses that helped the S&P 500 end October down for the month, putting a cap on its seven-month string of gains.
Among gainers, Freeport-McMoRan Copper & Gold Inc rose 2.7 percent to $75.35, while Dow component Travelers Co was up 2.6 percent at $51.07.
The bankruptcy filing on Sunday of CIT Group Inc, the lender to hundreds of thousands of small to medium-sized businesses, including retailers and fashion labels, had little impact on the banking sector, with the KBW bank index up 2.1 percent. The U.S. lender's prepackaged bankruptcy was one of the largest in U.S. corporate history. CIT's stock plummeted 59.7 percent to 29 cents on the New York Stock Exchange.
The Nasdaq's gains were limited after Citigroup cut its rating on Research In Motion to "sell" from "buy". The BlackBerry maker's stock tumbled 4.7 percent to $55.95. (Editing by Jan Paschal)