By Herbert Lash NEW YORK (Reuters) - Global stocks rallied for a third straight day and oil prices rose on Thursday after the European Central Bank renewed offers to aid ailing regional banks and investors warmed to an encouraging U.S. jobs report. The ECB threw another lifeline to struggling European banks through the purchase of covered bonds and with a renewed offer of longer-term loans to ward off a new credit crunch. European stocks jumped, and Wall Street rebounded from recent losses that had driven stocks into bear market territory on Tuesday as investors took heart that officials in Europe are finally coming to grips with the sovereign debt crisis. "That has been the worry for the past six months, that the banks would suffer some real problems, and the fact that the ECB is going to back them up, or potentially back them up, is alleviating some of the concerns," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. The euro rallied for a third day against the dollar and government debt prices on both sides of the Atlantic slid after the ECB's actions eased fears the region's recovering economies would slump back into recession. The euro gained 0.4 percent at 1.3405 and European shares closed up more than 2 percent. Equity markets in London rose more than 3 percent after the Bank of England moved to spur a sluggish UK economy by enlarging a stimulus program. Jean-Claude Trichet, in his final news conference as president of the ECB, said the bank's governing council decided to launch a new, covered-bond purchase program by spending 40 billion euros over a 12-month period from November. "The abundance of liquidity measures (Trichet) announced shows the ECB's resolve to boost liquidity, and that is quite satisfactory to the market, easing tensions in the financial and banking sectors," said Kathy Lien, director of FX research at GFT in Jersey City, New Jersey. The Dow Jones industrial average was up 64.14 points, or 0.59 percent, at 11,004.09. The Standard & Poor's 500 Index was up 7.26 points, or 0.63 percent, at 1,151.29. The Nasdaq Composite Index was up 17.11 points, or 0.70 percent, at 2,477.62. The FTSE 100 in London climbed 3.7 percent to 5291.26 and the FTSEurofirst 300 index of top European shares rose 2.6 percent to close at 940.65. The euro initially fell as the ECB's decision disappointed those who expected the central bank to follow the BoE's steps and ease monetary policy to support a struggling euro zone. "The market sees these as piecemeal measures, a Band-Aid on the problems," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "The market is disappointed. The ECB is looking slightly behind the curve." Oil prices rose on the developments in Europe and on U.S. data that showed jobless benefit claims rose less than expected last week, hinting at an improved labor market a day before the closely watched September non-farm payrolls report. "The markets are looking to embrace even the slightest improvement in the economy," said John Kilduff, a partner at hedge fund Again Capital in New York. Brent crude futures for November rose $1.54 at $104.27 a barrel, and U.S. crude gained $2.01 at $81.69 a barrel. The U.S. Treasuries market slumped as the ECB moves and encouraging U.S. jobs data reduced the safe-haven bids for bonds. The benchmark 10-year U.S. Treasury note fell 23/32 in price to yield 1.97 percent. (Reporting by Richard Leong, Wanfeng Zhou in New York; Blaise Robinson in Paris; Writing by Herbert Lash; Editing by Padraic Cassidy)
