U.S. stocks rallied Thursday, lifting the S&P 500 to an all-time closing high, as investors cheered Federal Reserve Chair Janet Yellen's testimony on Capitol Hill.

The Dow Jones Industrial Average rose 74.24 points, or 0.46 percent, to 16,272.65. [Hong Kong Company Registration Guide]The S&P 500 added 9.13 points, or 0.49 percent, to 1,854.29. The Nasdaq Composite Index surged 26.87 points, or 0.63 percent, to 4,318.93.

The S&P 500 succeeded in surpassing its previous record close set in Jan. 15 after missing the chance for three sessions in a row, while the tech-rich Nasdaq refreshed its new high in 14 years.

It's hard to tell how much recent weakness of the U.S. economy is a result of the abnormally cold weather, said Yellen in her testimony before the Senate Banking Committee about the economic outlook and monetary policy which was postponed by severe weather conditions then.

She also reaffirmed that it's appropriate for the U.S. central bank to keep accommodative monetary policy in place for some time. Her remarks offered at least a hint to investors that the Fed might slow or suspend a scale-back in its economic stimulus if the U.S. economy faltered.

On the economic front, the number of Americans who initially applied for jobless benefits in the week ending Feb. 22 rose 14, 000 to 348,000, the Labor Department said Thursday, above market expectations.

Meanwhile, new orders for manufactured durable goods in January decreased 2.2 billion U.S. dollars, or 1.0 percent, to 225.0 billion dollars, reported the Commerce Department. The decrease came less than analysts' forecast.

In corporate news, J.C. Penney shares skyrocketed 25.34 percent to 7.47 dollars apiece. [Businesses Registration]The troubled retailer reported a narrower- than-expected loss in the fourth quarter after Wednesday's closing bell and issued positive sale guidance for the first quarter.

Shortly after the closing bell, the Gap Inc. released less-than- expected revenues in the fourth quarter and issued profit outlook trailing estimates. Shares of the multinational clothing and accessories retailer dropped in after-hours trading.

The CBOE Volatility Index, widely considered as a fear gauge of the market, dipped 2.16 percent to end at 14.04 on Thursday.

In other markets, the U.S. dollar retreated against most major currencies. In late New York trading, the euro rose to 1.3709 dollars from 1.3684 dollars of the previous session. The greenback bought 102.07 Japanese yen, lower than 102.46 yen of the previous session.

Oil prices fell as the market read Yellen's remarks as that the U.S. central bank is likely to keep the tapering program. Light, sweet crude for April delivery moved down 19 cents to settle at 102.4 dollars a barrel on the New York Mercantile Exchange, while Brent crude for April delivery lost 56 cents to close at 108.96 dollars a barrel.

The so-called tapering of the U.S. central bank would likely boost the greenback, making dollar-priced oil more expensive for countries using other currencies, thus dampening the demand for oil.

Gold futures on the COMEX division of the New York Mercantile Exchange rose as escalating tension in Ukraine increased the appeal of safe-haven gold.

The most active gold contract for April delivery rose 3.8 dollars, or 0.29 percent, to settle at 1,331.8 dollars per ounce.