Stocks closed at session highs Monday, logging their best one-day rally in almost two weeks, boosted by Ben Bernanke's earlier comments that the Fed may continue its easy monetary policy if the jobs market continues to show signs of weakness.
Stocks are on track to post their best quarter since 1998.
The Dow Jones Industrial Average surged 160.90 points, or 1.23 percent, to close at 13,241.63, led by JPMorgan and AmEx . Verizon was the only Dow component to end lower. The blue-chip index is on track to log its sixth-consecutive month of gains.
The S&P 500 jumped 19.40 points, or 1.39 percent, to finish at 1,416.51, posting its highest close since May 2008. And the Nasdaq rallied 54.65 points, or 1.78 percent, to end at 3,122.57, logging its best close since November 2000.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, closed near 14.
All 10 S&P sectors ended firmly in positive territory, led by health care and techs.
“The market is feeling more comfortable that Bernanke is not going to pull the rug out from underneath them and that they can really trust the rally,” said Carol Pepper, the CEO of Pepper International.
Bernanke said the U.S. economy needs to grow more quicklyif it is to produce enough jobs to further bring down the unemployment rate, which currently sits at 8.3 percent.
"Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies,'' Bernanke told a gathering of the National Association for Business Economics. (Read More: Bernanke Reminds Markets Economy May Still Need Help)
Gold prices surged nearly 2 percent, while the U.S. dollar tumbled against a basket of major currencies.
Still, Pepper said the Fed is likely to keep its policy unchanged at the next FOMC meeting and are unlikely to start another QE3 for at least another month.
Meanwhile, Pepper expects the market to rally “at least another 10 to 15 percent” by year-end based on strong fundamentals and improved market confidence, though she warned there will be some pullbacks along the way.
Health care stocks, one of the biggest underperformers of the broader market this year, propelled the market higher as the Supreme Court hears argumentson the 2-year old U.S. health care overhaul law.
While an actual ruling isn’t expected until June, analysts project the court will uphold the law, which will help boost the sector, especially hospital stocks such as HCA Holdings and Tenet Healthcare .
Other health care stocks such as Edward Lifesciences and Medtronic also rallied.
Techs also fueled the gains, with Dell trading higher after Brean Murray added the firm to its "long-term conviction" list.
A handful of Internet companies were also performing well including Baidu , Amazon.com and Ebay .
Yahoo appointed three new independent directorsas it prepares for a proxy fight with activist hedge fund investor Daniel Loeb.
AmEx climbed after the credit-card provider announced a 11 percent dividend increase.
Lions Gate Entertainment jumped after the movie "The Hunger Games" made a $214 million global debut, marking Hollywood's third-highest opening. In addition, Stifel raised its price target on the firm to $19 from $17.5 and Caris boosted its rating to "average" from "below average."
Safeway was the biggest laggard on the S&P 500 after Credit Suisse downgraded the supermarket chain to "neutral" from "outperform," citing a larger-than-expected underfunded pension liability.
BATS Global Markets CEO Joe Ratterman apologized over the weekendfor a system failure that caused the exchange operator to trade erroneously for less than a penny on its market debut Friday and resulted in Apple's shares being temporarily halted. The company's withdrawn initial public offering has been put on hold "for the foreseeable future."
On the economic front, pending home sales unexpectedly declined0.5 percent to 96.5 in February, according to the National Association of Realtors. Still, the index was up solidly from the the same period a year ago.
—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC—
Coming Up This Week:
TUESDAY: S&P Case-Shiller home price index, consumer confidence, 2-yr note auction, Fed's Rosengren speaks; Earnings from Lennar, Walgreen
WEDNESDAY: Weekly mortgage apps, durable goods orders, oil inventories, 5-yr note auction, Fed's Bullard speaks, FDA discusses obesity drugs
THURSDAY: GDP, jobless claims, corporate profits, Fed's Plosser speaks, 7-yr note auction, farm prices, Fed's Lacker speaks; Earnings from Best Buy, Research In Motion
FRIDAY: Personal income & outlays, Chicago PMI, consumer sentiment, Stringer's last day as Sony CEO
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