New York - Call it the Bernanke Boost.
The stock market, which has been marching higher for a week, got extra fuel Thursday after Federal Reserve Chairman Ben Bernanke said the central bank will keep supporting the economy.
The Dow Jones industrial average and Standard & Poor's 500 surged to all-time highs. And the yield on the 10-year Treasury note continued to decline as investors bought bonds. Stocks that benefit most from a continuation of low interest rates, such as homebuilders, notched some of the biggest gains.
The chairman made the comments in a speech late Wednesday after U.S. markets had closed, saying the economy needs the Fed's easy-money policy "for the foreseeable future."
He said the U.S. economy needs help because unemployment is high, Bernanke said. The remarks seemed to ease investors' fears that the central bank will pull back on its economic stimulus too quickly. The Fed is currently buying $85 billion a month in bonds to keep interest rates low and to encourage spending and hiring.
Stock index futures rose overnight and the market surged at the open Thursday.
"It's back to the old accommodative Fed, so the markets are happy again," said Randy Frederick, Managing Director of Active Trading and Derivatives at the Schwab Center for Financial Research.
Stocks slumped last month after Bernanke laid out a possible timetable for the end of stimulus, saying the Fed would likely ease back on its monthly purchases if the economy strengthened sufficiently.
On Thursday, the S&P 500 index jumped 22.40 points, or, 1.4 percent, to 1,675.02, surpassing its previous record close of 1,669 from May 21. The index rose for a sixth straight day, its longest streak in four months.
The Dow rose 169.26 points, or 1.1 percent, to 15,460.92, above its own all-time closing of 15,409 set May 28.
The Nasdaq composite rose 57.55 points, or 1.4 percent, to 3,578.30.
In government bond trading, the yield on the 10-year note fell to 2.57 percent from 2.63 percent Wednesday. It had surged as high as 2.74 percent Friday after the government reported strong hiring in June. Many traders took that report as a signal that the Fed would be likely to slow its bond purchases.
The Fed has said it plans to keep short-term rates at record lows at least until unemployment falls to 6.5 percent. Bernanke emphasized Wednesday that the level of unemployment is a threshold, not a trigger; the central bank might decide to keep its benchmark short-term rate near zero even after unemployment falls that low.