NEW YORK, Nov 30, 2007 (AFP) - US stock markets opened with a rally Friday as investors bet up the odds that the US central bank would soon cut borrowing costs again following back-to-back interest rate cuts in September and October.

The Dow Jones Industrial Average surged 116.48 points (0.88 percent) to 13,428.21 in initial trades following three days of gains.

The Nasdaq composite jumped 25.39 points (0.95 percent) to 2,693.52 and the broad-market Standard & Poor's 500 index gained 13.18 points (0.90 percent) to 1,482.90.

Stocks pushed higher following a speech by Federal Reserve chairman Ben Bernanke late Thursday. The Fed chief warned that strains in the financial markets may lead to broader economic problems in comments seen as hinting at a rate cut.

"Bernanke yesterday did seem to be indicating his personal belief that rate cuts are necessary," said Dick Green, a market analyst at Briefing.com.

The Fed is due to meet on December 11 to deliberate US interest rates.

In other news, the government announced that consumer spending edged higher last month, by 0.2 percent, but the gain was weaker than most economists had expected.