GLOBAL MARKETS-Stocks rally, euro rises on ECB speculation

* Euro rebounds against U.S. dollar on ECB speculation

* Global stocks rise on signs of stronger economic growth

* Oil prices gain after raft of upbeat economic data (Adds close of European markets)

By Herbert Lash

NEW YORK, Dec 2 (Reuters) - The euro rebounded against the U.S. dollar on Thursday and global stocks gained amid a recent raft of upbeat economic data and on speculation the European Central Bank had boosted its buying of sovereign debt.

Investors were disappointed by the lack of a more aggressive policy response by the ECB to the debt crisis after its monthly meeting, but the euro rose on reports the bank was buying Portuguese and Irish debt.

Traders reported ECB purchases triggered a drop in the premium investors demand to buy Portuguese and Irish bonds over German benchmarks. They said the ECB had been buying the two countries' debt at a modestly higher rate recently. [GVD/EUR] [ID:nLDE6B10I4]

President Jean-Claude Trichet said the ECB decided to conduct three-month liquidity operations in January, February and March "with full allotment." Until recently the central bank had been expected to phase out unlimited liquidity measures.

The ECB kept interest rates on hold at 1.0 percent as expected and extended its liquidity safety net for vulnerable euro zone banks, promising to provide unlimited weekly, monthly and three-month funding until at least April.

European equities hit a two-week closing high after falling on news of weaker-than-expected U.S. jobless claims data. Analysts stayed positive on the equity market's outlook.

The FTSEurofirst 300 <.FTEU3> index of top European shares finished up 1.6 percent at 1,106.18 points, its highest close since Nov. 18.

The ECB "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 .

Data for pending U.S. home sales showed an unexpected jump in October and higher-than-expected sales by U.S. retailers in November boosted investor sentiment.

Also, 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. [ID:nSGE6B109L]

The Dow Jones industrial average <.DJI> was up 101.90 points, or 0.91 percent, at 11,357.68. The Standard & Poor's 500 Index <.SPX> was up 13.40 points, or 1.11 percent, at 1,219.47. The Nasdaq Composite Index <.IXIC> was up 24.38 points, or 0.96 percent, at 2,573.81.

Some analysts said Trichet's comment that he never said what the limit was of the ECB's bond-buying program also helped the euro bounce off session lows around $1.3060.

The euro was up 0.59 percent at $1.3219, while the dollar was down against a basket of major currencies, with the U.S. Dollar Index <.DXY> off 0.65 percent at 80.187.

Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto, said Trichet's comments suggest the option of further bond purchases "is not necessarily off the table at all."

Bond prices trimmed losses to trade close to break-even. The benchmark 10-year U.S. Treasury note was flat at 2.96 percent.

U.S. light sweet crude oil gained 75 cents to $87.50 a barrel, while spot gold prices rose $9.71 to $1,396.40 an ounce.

Earlier in Asia, Japan's Nikkei share average hit a five-month high, rising 1.8 percent <.N225> to the highest close since June 22. The MSCI index of Asia Pacific stocks outside Japan was up 1.7 percent <.MIAPJ0000PUS>. (Reporting by Gertrude Chavez-Dreyfuss, Wanfeng Zhou, Richard Leong in New York; Kirsten Donovan, Atul Prakash in London; Writing by Herbert Lash; Editing by Kenneth Barry)