Stocks closed mostly higher Thursday as Wall Street brushed aside concerns about a Chinese interest rate hike to focus on comments by Federal Reserve Chairman Ben Bernanke that a pause in U.S. rate increases may be ahead.

In trading pushed and pulled by the cross currents of earnings reports, fluctuating energy prices and international events, Bernanke's comments overrode all other distractions, analysts said.

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"What he's coming through very clearly and saying is we will probably pause soon but don't assume we're done because we pause. ... But I think the market is just reacting to 'Hey, hey, Ben said we might be done soon'," said Jeff Kleintop, chief investment strategist for PNC Wealth Management. "Whenever you take a little uncertainty out of the picture, well, the market is going to like that."

The Dow Jones industrial average gained 28.02, or 0.3 percent, to close at 11,382.51.

Broader stock indicators also moved higher. The Standard & Poor's 500 index rose 4.31, or 0.3 percent, to 1,309.72, and the Nasdaq composite index rose 11.32, or 0.5 percent, to 2,344.95.

The gains in stocks offset early reaction to an announcement by Chinese officials that they will raise interest rates to slow a churning economy. China's rapid growth has accounted for a sizable share of worldwide demand for raw materials and other goods, and the announcement pushed down prices for oil, commodities and European stocks.

The price of oil fell 96 cents to settle at $70.97 a barrel on the New York Mercantile Exchange. That came after the Energy Department said demand for gasoline rose just 0.3 percent over the past four weeks compared with the same period in 2005. At this time last year, demand had risen 1.5 percent.

But momentum was reversed in U.S. equity markets after the start of congressional testimony by Bernanke.

While the Fed chairman told Congress that rising energy prices could jeopardize a strong economy and lead to further rate hikes, the market chose to focus on comments suggesting a temporary pause may be coming.

"At some point in the future the committee may decide to take no action at one or more meetings in the interest of allowing more time to receive information relevant to the outlook," Bernanke said. "Of course, a decision to take no action at a particular meeting does not preclude actions at subsequent meetings," he added.

That was all investors needed to hear.

"The knee-jerk reaction (to China's rate hike) was simply followed by money on the sidelines that said this is an opportunity to get in," said Richard Cripps, chief market strategist for Stifel Nicolaus. "Then Bernanke's comments just emphasized the larger issue that the market is trying to deal with, which is the Fed is going to get out of the way."

Bernanke's comments also boosted bond prices, pushing yields lower. The price of the 10-year Treasury note rose 9/32 point, or $2.813 per $1,000 in face value, while its yield fell to 5.07 percent from 5.11 percent late Wednesday.

The markets' rise Thursday reflects continued optimism among investors that the economy will remain strong, gradually slowing, while inflation stays in check. In the near term, investors will be keeping an eye on energy prices and on data including first-quarter economic growth figures to be released Friday, and reports next week on personal spending and income, and employment for signs that things remain on track, analysts said.

"This market is just extremely resilient and if we don't get a major spike up in energy prices or interest rates from current levels, the strong earnings environment we find ourselves in could help carry the markets higher for several more weeks," said Michael Sheldon, chief market strategist at Spencer Clarke LLC.

Shares of Microsoft Corp. (MSFT) gained 15 cents to close at $27.25, before releasing its quarterly earnings after the close. After posting those results, which came in just shy of analysts expectations, Microsoft fell 35 cents to $26.90 in after-hours trading.

Intel Corp. (INTC) gained 59 cents to $20.08 after the company's CEO said he plans a broad restructuring.

Exxon Mobil Corp. (XOM) fell 68 cents to $62.42. The world's largest oil company posted higher first quarter profits Thursday, but fell short of analysts' expectations.

The China move also pushed down the shares of many commodities producers. Alcoa Inc. (AA)fell $1.56 to $33.40. U.S. Steel Corp. (X) was down $2.77 to $66.18.

Other movers included XM Satellite Radio Holdings Inc. (XMSR) declined $1.21 to $20.80. The company reported a wider first-quarter loss Thursday and said regulators are probing its marketing practices.

Shares of Comcast Corp. gained $1.25 to $30.45, after the cable operator reported a tripling in its quarterly profits, topping expectations.

Pfizer Inc. (PFE) fell 11 cents to $24.86 after shareholders rejected calls to oust some of its board members as a means of protesting its CEO's pay package.

Advancing issues barely outnumbered decliners on the New York Stock Exchange, where volume came to 2.09 billion shares, topping the 1.78 billion shares that changed hands Wednesday. However, decliners were ahead of advancers on the Nasdaq.

The Russell 2000 index of smaller companies declined 3.83, or 0.5 percent, to 761.40.

Overseas, Japan's Nikkei stock average rose 0.3 percent. Britain's FTSE 100 lost 0.7 percent, Germany's DAX index fell 0.6 percent, and France's CAC-40 declined 0.7 percent.

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