US stocks have surged following gains on European markets and after Ben Bernanke said a still-weak job market merited the Federal Reserve keeping easy money policy in place.

At the close of New York trade the Dow Jones Industrial Average was up 160.90 points (1.23 per cent) at 13,241.63.

The broad-market S&P 500 gained 19.40 points (1.39 per cent) to 1,416.51, while the tech-rich Nasdaq Composite added 54.65 (1.78 per cent) to 3122.57.

Analysts credited the strong performance to rises in European markets and Bernanke’s speech signalling he is still not too worried about inflation.

He “seemed to suggest that the Fed recognises the need to remain accommodative in its policies, given that job market conditions remain far from normal,” said Briefing.com.

Bernanke said the Fed’s low interest rate policies should be kept in place to ensure a pickup in production and consumption by consumers and businesses.

“We cannot yet be sure that the recent pace of improvement in the labour market will be sustained,” Bernanke said in a speech outside Washington.

The continuing low-rates signal helped banks, with Morgan Stanley closing up 4.1 per cent, JPMorganChase up 2.2 per cent and Wells Fargo 2.6 per cent.

Amazon’s stock surged 4.0 per cent amid unconfirmed reports it was close to launching its second-generation Kindle Fire tablet, its low-cost challenger to Apple’s hit iPad.

Online retailers eBay and Priceline also surged, eBay gaining 2.7 per cent and Priceline 2.9 per cent.

US bond prices were flat. Interest on the ten year bond stood at 2.24 per cent while the 30 year bond was at 3.33 per cent.