NEW YORK (CNNMoney) -- U.S. stocks held on to their rally as markets closed Tuesday, as investors digested testimony from Fed chairman Ben Bernanke and refocused on positive earnings.
The Dow Jones industrial average (INDU) rose 78 points, or 0.6%, the S&P 500 (SPX) added 10 points, or 0.7%, and the Nasdaq (COMP) gained 13 points, or 0.5%.
Bernanke told a Senate panel that risks to economic growth have heightened and that the Fed is "looking for ways to address the weakness in the economy should more action be needed."
Bruce McCain, chief investment strategist for Key Private Bank, said markets staged a comeback because Bernanke's testimony didn't kill all hope for further central bank action.
"The disappointment that there was nothing promised from Bernanke caused the markets to sell off," he said. "But upon reflection, he also didn't say no, so that keeps the hope alive."
Investors were looking for hints of additional stimulus, including the possibility of more bond buying, or quantitative easing. Bernanke was non-committal.
While Bernanke's testimony dashed hopes of a quick fix, investors may be better off in the long run, said Kim Caughey Forest, senior equity analyst for Fort Pitt Capital Group.
"Bernanke was saying, 'Let's fix what's wrong rather than focusing on the short term,'" she said. "Overall, investors should want the economy to improve for good fundamental reasons, not for the Fed manipulating it."
The dollar fell against the euro and British pound, but gained versus the Japanese yen.
Oil for August delivery settled up 79 cents to $89.22 a barrel.
Gold futures for August delivery fell $2.10 to $1,589.50 an ounce.
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