Wall Street ends 3-day drop on Bernanke

US stocks stopped a three-day slide, but ended well off the highs as investors took the suggestion of further Federal Reserve stimulus as a mixed blessing.

The Dow Jones industrial average rose 44.73 points, or 0.36 percent, to 12,491.61 at the close. The Standard & Poor's 500 Index gained 4.08 points, or 0.31 percent, to 1,317.72. The Nasdaq Composite Index advanced 15.01 points, or 0.54 percent, to 2,796.92.

European shares bounced back from recent losses as risk appetite improved after US Federal Reserve Chairman Ben Bernanke said the central bank was prepared to introduce more stimulus measures if the economy weakened further.

The FTSEurofirst 300 index of top European shares closed 0.7 percent higher at 1,099.09, after falling in the past three sessions on lingering concerns about the euro zone debt crisis, as investors reacted positively to Bernanke's comments.

The Nikkei stock average bounced off a major support line and rose 0.4 percent as investors snapped up shares of trading houses after Credit Suisse initiated sector coverage with an "outperform" rating, offsetting worries about euro zone debt. The benchmark Nikkei average closed up 37.22 points at 9,963.14, moving back towards the closely watched 10,000 line that it had fallen below the previous day.

The Nikkei bounced back above key support at the 200-day moving average at 9,897.65 after breaching the level briefly in the morning.