U.S. stocks jumped on Thursday as Federal Reserve Chairman Ben Bernanke said inflation expectations have fallen, while strong earnings from investment bank Bear Stearns Cos. bolstered financial shares.

The Dow Jones industrial average was up 161.70 points, or 1.49 percent, at 10,978.62. The Standard & Poor's 500 Index was up 21.50 points, or 1.75 percent, at 1,251.54. The Nasdaq Composite Index was up 50.52 points, or 2.42 percent, at 2,136.52.

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Among local issues, Los Angeles biotechnology firm and penny stock Clearant Inc. saw its shares rise nearly 18 percent to 80 cents after it announced positive results from a study of its tissue sterilization process. The study was published in the Journal of Orthopedic Research.

Hi-Shear Technology Inc., a Torrance aerospace firm, saw shares rise $1.77, or 16 percent, to $12.87 as speculation continued it would be added to Investor Business Daily's IBD 100 index.

KB Home, the Los Angeles homebuilder, rose $1.91, or 4.4 percent, to $45.10, despite reducing its annual forecast as home sales continued to slow. The forecast reduction was in line with estimates, while its second quarter earnings beat forecasts.

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