The Dow also hit an intraday record. DuPont (DD), Microsoft Corp.(MSFT), Home Depot Inc.(HD) and McDonald's Corp.(MCD) were the best performers among blue-chip companies, with gains of more than 1%. Real-estate and technology shares led gains.
In the Fed's regional survey known as the "Beige Book" released Wednesday, the St. Louis Fed reported that some manufacturers were citing "candidates' inability to pass drug tests or to consistently report to work". Action Economics believes the Fed will start its balance sheet unwind in September or October, and will increase the funds rate another 25 bps in December given the positive outlook on growth and expectations that the Federal Open Market Committee will continue to see "idiosyncratic" elements pushing down price pressures.
"People were anxious about her coming out more hawkish".
Yesterday, she said interest rates don't have to rise all that much further. A neutral interest rate level refers to one that neither encourages nor discourages economic activity.
Yellen's remarks come as other central bankers have been expressing a desire to taper easy-money policies that have been in place in the aftermath of the 2008-'09 financial crisis.
Broader measures of inflation have also weakened lately.
"It seems like [Yellen's] dialing back a little bit of the hawkish sentiment from last time", said Karyn Cavanaugh, senior market strategist at Voya Financial.
However, she listed inflation as one of the uncertainties the economy is facing. "The market was a little anxious but she's back to the same dovish Yellen".
Yellen testifies before the Senate Banking Committee later in the day.
Asian shares scaled a two-year top on Thursday as investors wagered policy tightening in the United States would be glacial at best, lifting Wall Street to record peaks and lowering bond yields nearly everywhere. The USD is putting in a mixed performance following Yellen's testimony, rising against the Euro while losing ground against the JPY, GBP and commodity-linked currencies including the NZD and AUD.
United Continental Holdings Inc.(UAL) shares rose 4.7% after investment firms raised their price targets on the airline operator.
-West Texas Intermediate crude climbed 1 percent to settle at $45.49 a barrel.
-The yen gained 0.7 percent to 113.14 per dollar. That weighed on the dollar and US Treasury yields, helping lift gold further from Monday's near four-month low.