US stocks soar on Fed, US debt progress

New York - US stocks jumped more than 1% on Tuesday after new US Federal Reserve chair Janet Yellen confirmed she would continue existing Fed monetary policy.

At the closing bell, the Dow Jones Industrial Average leapt 188.29 points (1.19%) to 15,990.08.

The broad-based S&P 500 surged 19.53 (1.09%) to 1,819.37, while the tech-rich Nasdaq Composite Index added 42.86 (1.03%) at 4,191.03.

Appearing in her first congressional hearing since taking the top post at the US central bank, Yellen said she expects to continue predecessor Ben Bernanke's plan to scale back stimulus and keep interest rates low until the labour market improves significantly.

Also, House of Representatives Republicans signaled they would agree to extend the US borrowing authority without attaching controversial conditions. The announcement by House Speaker John Boehner averts a major showdown with President Barack Obama over raising the debt limit that could have rattled markets.

"The fact that Fed Chair Yellen didn't rock the hawkish boat with her testimony today and that the GOP-led House has agreed to bring a clean debt limit bill to a vote on Wednesday has bolstered the turnaround sentiment," Briefing.com analysts said in a market note.