Will investors finally buy Bernanke's explanation?

If at first you don't succeed...

Federal Reserve Chairman Ben Bernanke has taken another stab at explaining how the central bank views the economy and what that means for future Fed action.

At an economic conference after the stock market closed Wednesday, he said the economy continues to need highly accommodative monetary policy for the "foreseeable future."

In early trading Thursday, stocks were sharply higher after Bernanke's comments, which served to again draw a distinction between the Fed's near-zero interest rates and its $85-billion-a-month bond-buying program.

(Read More: Bernanke: Highly Accommodative Policy Needed for 'Foreseeable Future')

"He's not taking back the tapering talk," Jim O'Sullivan, chief U.S. economist at High Frequency Economics, told CNBC on Thursday. "But he's emphasizing again and again, tapering is not tightening."

"We're a long way away from tightening," because tapering asset purchases would still represent continued buying, O'Sullivan said in a "Squawk Box" interview. "Ultimately, this is not a bad environment for the stock market."

The Fed has said repeatedly that policymakers won't consider raising short-term interest rates until the unemployment rate falls to at least 6.5 percent with inflation under 2.5 percent.

"He's putting more and more emphasis on ... the short term interest rate, which is not supposed to rise until the unemployment rate is 6.5 percent or lower," said Fed-watcher Greg Ip, CNBC contributor and editor at The Economist. "[Bernanke's] starting to walk back from that guidance, saying 'we could be at zero much lower than that.' Maybe that's what the market is excited over."

Despite what Bernanke said Wednesday about the Fed failing in its dual-mandate on employment and inflation, JPMorgan Funds Chief Global Strategist David Kelly told CNBC, "What we know is the economy is gradually improving. The unemployment rate is … coming down slowly, but it's coming down steadily." He added that the cost of quantitative easing is getting "bigger and bigger and bigger."

Kelly warned the Fed will eventually raise interest rates and it's going to be "too expensive" for the Fed to maintain its balance sheet. "It's [also] going to be too disruptive to dismantle it," he argued.

—By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.