U.S. stocks rallied 1% Thursday, building on the previous session's big gains, as investors cheered strong retail sales and welcomed the European Central Bank's plan to extend liquidity measures.

The Dow Jones industrial average jumped 107 points, or 1%; the S&P 500 climbed 15 points, or 1.3%; and the Nasdaq rose 30 points, or 1.2%.

Gains were broad-based, with all but three of the Dow 30 rising. Home Depot, Alcoa and Bank of America led the advances.

Retailers helped prop up stocks as strong chain-store sales rolled in, signaling consumers are loosening their purse strings. Shares of Abercrombie, Dillards and JCPenney all jumped.

"This continues the trend we've been seeing in the past couple months of retail sales being better than expected," said Ryan Detrick, senior technical strategist Schaeffer's Investment Research. "It's a very positive signal that consumers are coming back and confidence is coming back with them."

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Goldman Sachs CEO Lloyd Blankfein will testify Tuesday that his firm didn't mislead investors and didn't bet against the housing market, according to his opening remarks released Monday.

"We didn't have a massive short against the housing market and we certainly did not bet against our clients," Blankfein said in remarks prepared for Tuesday's testimony, which he will give before the Permanent Senate Subcommittee on Investigations.

Goldman Sachs is accused by the Securities and Exchange Commission of failing to tell investors that hedge fund Paulson & Co. helped select securities for a portfolio that it was also betting against.

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Nearly half of all U.S. states reported rising unemployment rates in March, the government said Friday, with rates above the national average in 11 states and the District of Columbia.

A total of 24 states suffered jobless rate increases in March, according to the Labor Department's monthly report. But rates declined last month in 17 states and the District of Columbia.

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Consumer borrowing dropped in February, after increasing for the first time in a year during the previous month, according to a government report released Wednesday.

Total consumer credit fell a seasonally adjusted $11.5 billion, at an annual rate of 5.6%, to $2.448 trillion in February, the Federal Reserve reported.

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