BOSTON (MarketWatch) — Bank stocks rallied Thursday as investors cheered better-than-expected economic data, General Motors Co.’s initial public offering and expectations of a bailout for Ireland’s troubled banking sector.

The Financial Select Sector SPDR Fund XLF, -0.29% was up 1.4% as the Dow Jones Industrial Average DJIA, +0.15% rallied almost 200 points.

Most components of the financial-sector fund were higher, although notable exceptions included Fifth Third Bancorp FITB, -0.42% , which was 2.5% lower, and Regions Financial Corp. RF, -1.12% , which was under pressure this week after the bank announced the departure of three top executives. Fitch Ratings on Thursday downgraded Regions’ long-term issuer default rating. Shares lost 4.2%.

Stocks rally on Ireland, GM

Citigroup Inc. C, -0.66% gained 2.6% and Morgan Stanley MS, -1.01% rose 1.9% to be among the top bank gainers. The SPDR KBW Bank ETF KBE, -0.41% rose 0.7%.

Speculation that Ireland would accept a bailout lifted sentiment around the globe on Thursday. See full story on growing expectations for an Ireland bailout.

General Motors GM, -1.04% shares jumped on their first day of trading. See complete story on GM IPO.

In economic data, the Philly Fed index surged in October. See Economic Report on Philadelphia factory activity.

Also Thursday, the government said jobless claims rose by 2,000 to 439,000 in the latest week.