* U.S. private-sector job creation leaps in November
* Euro surges against U.S. dollar as an official talks
* Chinese factory data supports global growth bets
* Dow up 2.3 pct, S&P up 2.1 pct, Nasdaq up 2.1 pct (Updates to late afternoon, changes byline)
By Edward Krudy
NEW YORK, Dec 1 (Reuters) - U.S. stocks surged 2 percent on Wednesday as European officials' efforts to save the EU appeared to be near a critical point, while the latest data suggested the global economic recovery was steaming ahead.
As some of the panic of previous days eased, investors focused on beaten-down equity prices and valuations that many analysts say are cheap. The market rallied broadly with economically sensitive cyclical areas in the lead.
Aluminum producer Alcoa Inc rose 3.3 percent to $13.55, while Home Depot Inc, whose fortunes are tied to the U.S. consumer, jumped 4.9 percent to $31.68.
With the European Central Bank coming under pressure to take steps to stabilize the euro zone in the face of its debt crisis, investors appeared to be taking the view Europe's problems were not a systemic risk.
Meanwhile, the global economic recovery remained in place. U.S. private-sector payrolls achieved their biggest gain in three years, while global manufacturing activity picked up speed, boosted by China. Growth in the United States was stable.
"It seems that as bad as Europe's issues are, there is a growing sense that this is not a systemic problem that is going to bring the whole system down," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Beyond their troubles, we're seeing strong results in other parts of the world."
The U.S.-traded-stock of Banco Santander, the Spanish bank in the eye of the euro storm, jumped 7.8 percent to $10.37. U.S. investors have sold the stock relentlessly in recent weeks, turning it into a proxy for euro-zone risk aversion.
The Dow Jones industrial average gained 253.50 points, or 2.30 percent, to 11,259.52. The Standard & Poor's 500 Index rose 25.09 points, or 2.13 percent, to 1,205.64. The Nasdaq Composite Index added 52.37 points, or 2.10 percent, to 2,550.60.
Stocks extended gains in light volume after an official said the U.S. would be ready to back a larger European financial stability fund. The growing euro-zone debt crisis has sunk markets in recent weeks, making any step toward resolution important to sustained market recovery.
This was later denied by a U.S. Treasury Department spokesman, but that had little effect on investors.
Any optimism over recent steps to rein in the euro zone's debt problems has been short-lived. The EU/IMF rescue of Ireland last weekend was overshadowed by concerns about Portugal and other countries.
The S&P 500 traded above its 14-day moving average for the first time in 11 sessions and was having its best day in almost a month, pushing through the recent resistance point of 1,200.
"If we close above 1,200, the next stop is 1,225 to 1,230," said Tom Alexander, head of Alexander Trading in Savannah, Georgia.
That target area coincides with a recent two-year high and the 61.8 percent Fibonacci retracement of the benchmark's slide from October 2007 to March 2009, a key technical indicator.
The economic optimism helped boost the Dow Jones Transportation Average, which posted its second gain of more than 2.5 percent in less than a week, catapulting it to its highest level since September 2008. Wednesday's advance was led by gains in FedEx Corp, up 3.2 percent at $94, and CSX Corp, up 3.5 percent at $62.91.
The S&P 500 retail sector index rose 2.2 percent to 501.17, its highest level since September 2007, Reuters data showed, reflecting an optimistic outlook for the holiday shopping season. (Reporting by Edward Krudy; Editing by Jan Paschal)