* Bernanke comments ease fears of nationalizing banks

* Fed stands behind viability of banks

* Dow up 2.5 pct; S&P 500 adds 3.1 pct; Nasdaq up 2.7 pct

* For up-to-the-minute market news, click [STXNEWS/US] (Updates to later afternoon, changes byline)

By Chuck Mikolajczak

NEW YORK, Feb 24 (Reuters) - U.S. stocks rose on Tuesday, gaining more than 2 percent a day after hitting 12-year lows, after Federal Reserve Chairman Ben Bernanke signaled that nationalization of major banks was not at hand.

Bernanke testified to the U.S. Senate Banking Committee that the significant value built up in the country's banks would be lost if they were government-owned, easing investor fears that banks could be nationalized, wiping out shareholders.

Bernanke said that although there could be a time when it is necessary to close banks down, now is not the time. For more see [ID:nWAT011033].

Bank stocks surged. Bank of America (BAC.N: Quote, Profile, Research) climbed nearly 18 percent to $4.60 and the S&P Financial index jumped 8.2 percent.