The S&P/TSX composite index ran up 186.33 points to 12,493.26, pushing the TSX back into positive territory for the year, albeit only by 60 points or 0.5 per cent.
Bernanke said in a speech after markets closed Wednesday that the U.S. economy still needs help from the central bank’s low interest rate policies because unemployment remains high and inflation is below the Fed’s target.
The greenback weakened sharply following Bernanke's comments and the Canadian dollar surged 1.21 cents to 96.29 cents US after hitting an intraday high of 96.43 cents US.
U.S. indexes took off to record highs as the comments from the Fed chief reassured investors who were dismayed by his remarks last month that the Fed would likely slow its bond purchases later this year and end them around mid-2014 if the American economy strengthened.
The Dow Jones industrials jumped 169.26 points to 15,460.92, above its all-time closing high of 15,409 set May 28.
The Nasdaq gained 57.54 points to 3,578.3, its highest since October 2000. It remains well below the all-time high of 5,048 it reached March 10, 2000. The S&P 500 index advanced 22.4 points to 1,675.02, above its record close of 1,669 from May 21.
"Sit back and enjoy the bull market," said Ron Meisels, president of Phases + Cycles in Montreal.
"There is still a lot of money on the sidelines ready to buy bargains. And there are still bargains in New York and Toronto."
The Fed has been buying $85 billion of financial assets a month to keep interest rates low and encourage borrowing and spending. That stimulus has driven global stocks higher, so the prospect of reducing it has caused market volatility in recent weeks.
Bernanke’s latest comments came after the release of minutes from the Fed's most recent meeting showed that about half of the Fed’s 19-member policy-making committee supported an end to the bond-buying program late this year.
But many also agreed at the meeting last month that the job market’s improvement would have to be sustained before the Fed would reduce the purchases.
The meeting was held prior to the release of a stronger-than-expected U.S. employment report for June, which came out last Friday.
Gold prices shot up following Bernanke's comments, with the August contract on the New York Mercantile Exchange ahead $32.50 to US$1,279.90 an ounce.
Gold prices have enjoyed a sharp increase in recent years as a result of quantitative easing by the Fed and other central banks worldwide, but have fallen recently due to Bernanke's tapering comments.
All TSX sectors participated in Thursday's advance with the gold sector leading advancers, up about 6.5 per cent as Barrick Gold Corp. (TSX:ABX) rose $1.16 to C$15.85 while Goldcorp Inc. (TSX:G) climbed $1.85 to $27.20.
The sector is the worst performer by far on the TSX but has come off the worst declines of the year recently.
"It might be coming to a point here when it will start finding some support just above this place because probably the selling has been overdone," Meisels said.
The lower dollar also helped boost metal prices with September copper ahead nine cents to US$3.18 a pound.
The lower U.S. dollar lifted commodities because a weaker greenback makes it less expensive for holders of other currencies to buy oil and metals, which are dollar-denominated.
The base metals component climbed four per cent while First Quantum Minerals (TSX:FM) advanced 74 cents to C$16.42 and Teck Resources (TSX:TCK.B) improved by $1.47 to $23.31.
The energy group was ahead 1.46 per cent even as the August crude contract on the Nymex backed off $1.61 to US$104.91 a barrel after the International Energy Agency said that production from countries outside the Organization of the Petroleum Exporting Countries would rise by 1.3 million barrels a day next year.
Prices had closed at a 15-month high Wednesday after the American Petroleum Institute said that U.S. crude inventories fell by nine million barrels last week, much higher than the 3.8-million-barrel drop that analysts had expected.
Cenovus Energy (TSX:CVE) was up 70 cents to C$32.36 while Canadian Natural Resources (TSX:CNQ) advanced 62 cents to $33.29.
Financials rose 0.88 per cent as Scotiabank (TSX:BNS) climbed $1.20 to $56.94.
Utilities, beaten down recently along with other interest sensitive sectors such as telcos, made a strong showing, up almost two per cent. Atlantic Power (TSX:ATP) ran up 18 cents to $4.56 and TransAlta (TSX:TA) climbed 28 cents to $14.65.
On the earnings front, Quebec-based cable company Cogeco Cable (TSX:CCA), reported its third-quarter revenue increased 45.3 per cent to $464.5 million from $319.8 million in the same 2012 period. Profit declined fractionally to $53.05 million, or $1.08 per diluted share, from $53.12 million or $1.09 per share in the prior-year period and its shares gained $2.67 to $49.20.
Corus Entertainment Inc. (TSX:CJR.B) said that its quarterly net income was $89.9 million or $1.07 per diluted share, up from $43.2 million or 51 cents a year ago, largely as a result of a gain from the sale of its non-controlling interest in Food Network Canada for $55.4 million.
Ex-items, earnings were $34.5 million or 41 cents per share, down from $43.2 million or 52 cents a year earlier. Revenue was $200.1 million, down from $204.1 million. Corus also reduced its full-year guidance on profit and its shares fell $1.20 or 4.85 per cent to $23.55.
On Friday, traders will be looking to the first of the quarterly earnings reports from the big American banks. Both JPMorgan Chase and Wells Fargo report ahead of the market open.