Stocks advanced after Federal Reserve Chairman Ben Bernanke emphasised that low interest rates are still needed to support the labour market, driving the S&P 500 to another nearly four-year high.

Stocks opened higher and then padded gains throughout trading session, wiping away all of last week's losses, which were the steepest this year.

Before the opening bell, Bernanke said that continued accommodative policies were needed to confront deep problems in the jobs market. Some interpreted the statement to mean the door remains open for another round of monetary stimulus from the central bank.

The Dow Jones Industrial Average advanced 160.90 points, or 1.2%, to 13241.63. The Standard & Poor's 500-stock index rose 19.40 points, or 1.4%, to 1416.51 and ended the session with its highest close since May 19, 2008. The Nasdaq Composite climbed 54.65 points, or 1.8%, to 3122.57, its highest finish in more than a decade.

Health care stocks like Merck, up 1.7%, and Pfizer, up 1.6%, spearheaded the gains, followed closely by technology and consumer discretionary stocks. All 10 of the S&P 500's sectors gained ground. American Express rose 2.5%, J.P. Morgan Chase rose 2.2% and United Technologies rose 2.1%.

A pair of soft readings on the domestic economy did nothing to hinder the stock-market gains. Pending home sales fell slightly in February versus expectations for a modest gain. Separately, data showed business conditions in Texas-area manufacturing are expanding this month but at a slower pace than in February.

In corporate news, Lions Gate Entertainment climbed 4.5% after "The Hunger Games" grossed US$155 million in North America over the weekend, enough to be the third-largest opening weekend ever.

Cal-Maine Foods fell 6.1% after the egg producer reported fiscal third-quarter earnings that topped estimates, though revenue fell short of expectations, and gross margins declined with rising feed costs.

Arena Pharmaceuticals surged 25% after the company said its weight-loss drug candidate lorcaserin was accepted for review by European regulators, and confirmed that a US Food and Drug Administration advisory committee will meet to discuss the company's resubmitted application.

For Australian ADRs listed on the NYSE, BHP Billiton firmed $1.03 (1.44%) to $72.61, ResMed advanced 29 cents (0.91%) to $31.99, Telstra Corporation improved 12 cents (0.71%) to $17.09, Telecom Corporation of NZ climbed 19 cents (1.96%) to $9.86 and Westpac increased $1.94 (1.74%) to $113.52.

Treasury prices were mostly lower, resuming a recent pullback and pushing long-term yields higher for the first session in five, after Federal Reserve Chairman Ben Bernanke said further labour-market improvement may depend on faster US economic growth and stronger demand. At 7:45AM (AEST), the 10-year US Treasury note was 2.25% and the 5-year note was 1.08%.

Most European stock markets ended higher after Germany's Ifo business-climate index surprised to the upside, while Spanish stocks underperformed in the wake of a regional election and ongoing worries about the country's fiscal outlook.

The Stoxx Europe 600 index rallied 1% to 268.21, rebounding from a low of 265.25 earlier in the day. The UK's FTSE 100 index rose 0.8% to 5,902.70, the German DAX 30 index rose 1.2% to 7,079.23, and France's CAC 40 index rose 0.7% to 3,501.98.

Energy-related stocks were among the biggest gainers. Among the top performers in the Stoxx 600, Swedish oil-and-gas company Lundin Petroleum AB surged 7% after it said it encountered a 54-metre-gross oil column in an appraisal well.

In London, Tullow Oil PLC announced that it has made Kenya's first oil discovery and said the outlook for further success has been "significantly improved." Shares of Tullow Oil rose 6.6%. BG Group PLC added 1.8% after it said its fourth Tanzania well discovered gas. Partner Ophir Energy PLC leapt 18.8%.

Rio Tinto fell 18.00 pence (0.53%) to 3,377.10 pence and BHP Billiton rose 10.50 pence (0.55%) to 1,920.47 pence.

Other oil firms rose along with rising crude-oil prices. BP PLC advanced 0.9% and Royal Dutch Shell PLC gained 1.4%.

In Germany, the Ifo business-climate index rose to 109.8 in March, beating analyst expectations.

In France, oil-services firm Technip SA rose 4.1% after it secured a EUR600 million contract to develop a subsea-infrastructure project in the North Sea.

Spain's IBEX 35 index fell 0.7% to 8,224.70. The Spanish government Sunday failed to secure a majority in an election in Andalusia, which may make it harder for Prime Minister Mariano Rajoy to implement austerity measures in that region to cut the country's deficit.

Separately, Italy Prime Minister Mario Monti reportedly said Spain could reignite the euro-zone debt crisis if it fails to impose adequate austerity measures.

Asian stock markets ended mostly lower as global growth concerns continued to keep many buyers at bay, while investors adopted a cautious approach ahead of data releases in the US and Europe later in the week.

After seesawing for much of the day, Hong Kong's Hang Seng Index finished flat, China's Shanghai Composite Index rose 0.1% and Japan's Nikkei Stock Average added 0.1%.

South Korea's Kospi fell 0.4%, while Taiwan's Taiex tumbled 1.4%, succumbing to profit-taking pressure after a three-day advance.

China Petroleum & Chemical Corp. gained 1.5% in Hong Kong and 0.1% in Shanghai after its 2011 net profit rose 2%.

But China Construction Bank Corp. fell 1.2% in Hong Kong after it reported a 26% increase in 2011 net profit, but warned 2012 would be more challenging.

The performance also weighed on some other mainland banks traded in Hong Kong, with Bank of China falling 1.9% and Industrial & Commercial Bank of China declining 1.0%.

But those losses were offset by gains in local property firms, which advanced amid expectations that the weekend election of Leung Chun-ying as the next chief executive of Hong Kong may not hurt their outlook.

Sino Land jumped 4.0% and New World Development rose 3.8%, while Sun Hung Kai Properties added 2%.

China Eastern, meanwhile, lost 1.1% in Hong Kong and 1.8% in Shanghai. The airline separately reported that its 2011 net profit fell to CNY4.89 billion from CNY5.38 billion a year earlier.

In Tokyo, Nomura Holdings dropped 2.7%, extending last week's losses amid reported allegations about an employee's involvement in insider-trading, related to a share offering by oil firm Inpex Corp.

But Inpex rose 0.9%, in line with broad gains for resource-sector stocks. Among other commodity-linked shares, steel maker JFE Holdings rose 2.3%, and Pacific Metals gained 0.2%.

Base metals closed mostly higher on the London Metal Exchange, gaining ground later in the session following dovish remarks by US Federal Reserve Chairman Ben Bernanke.

US crude-oil futures prices eked out a modest rise and awaited direction from upcoming US weekly oil inventory data due Wednesday.

Gold rose to their highest level in almost two weeks, as investors sought the metal as an alternative to the US dollar after Federal Reserve Chairman Ben Bernanke reiterated his support for the central bank's accommodative monetary policies.