U.S. stocks rally after Fed Chair Yellen's speech

U.S. stocks extended gains in the morning session Wednesday, as investors still focused on U.S. Federal Reserve Chair Janet Yellen's cautious stance on interest rate hikes.

At midday, the Dow Jones Industrial Average gained 95.30 points, or 0.54 percent, to 17,728.41. The S&P 500 rose 10.40 points, or 0.51 percent, to 2,065.41. The Nasdaq Composite Index was up 25.09 points, or 0.52 percent, to 4,871.72.

"Given the risks to the outlook, I consider it appropriate for the FOMC to proceed cautiously in adjusting policy," Yellen said in a speech to the Economic Club of New York Tuesday.

Federal Open Market Committee (FOMC) is the policy-making panel of the Federal Reserve, the U.S. central bank.

Some analysts believed the U.S. central bank is likely to raise interest rates just once this year and no more than twice next year based on Yellen's dovish remarks.

"She began by admonished us that Fed guidance is a 'forecast,' not a 'plan,' meaning it is by no means set in stone," said Chris Low, the chief economist at FTN Financial, Wednesday.

Global markets cheered Yellen's speech and bond prices rallied, while the U.S. dollar fell more than 1 percent.

The ADP National Employment Report showed Wednesday that the U.S. private sector added more jobs than expected in March, suggestive of a continued improvement in the U.S. labor market.

The ADP data are closely watched as a pre-indicator for the non-farm payrolls report due out Friday. Endit