The Federal Reserve chairman told lawmakers the economy seems to be on "reasonably firm footing," with inflation under control. His generally positive assessment supports the view that the Fed, which has raised interest rates eight times over the past year, will likely continue nudging rates higher at a gradual pace. Fed policy-makers are widely expected to raise the federal funds rate by another quarter-point to 3.25 percent at their next meeting, set for June 29-30.

According to preliminary results, the Dow Jones industrial average rose 26.16, or 0.2 percent, to 10,503.02.

The broader gauges were also solidly higher. The Standard & Poor's 500 index was up 6.26, or 0.52 percent, at 1,200.93. The Nasdaq composite index added 16.73, or 0.8 percent, to 2,076.91.

Bonds were moderately lower, however. The yield on the 10-year note rose to 3.95 percent from 3.94 percent late yesterday. The dollar was higher against other major currencies and gold prices fell. Crude oil surged $1.74 to settle at $54.28 per barrel on the New York Mercantile Exchange a day after posting a steep decline.

The Russell 2000 index, which tracks smaller company stocks, was up 5.76, or 0.93 percent, at 626.23.