Wall Street rode a wave of good news Wednesday, as the Dow Industrials soared 212 points to close above 11,000 for the first time in a week.

Stoked by indications of a pause in rate hikes from Fed Chairman Ben Bernanke, strong corporate earnings, tame inflation data and lower oil prices, the market shook off its Mideast jitters as the Dow posted its second-best day of the year.

The Nasdaq and the S&P 500 also realized major gains, with both indices gaining nearly 2 percent. The S&P finished in positive territory for the year.

The Dow Jones industrial average shot up 212.19 points, or 1.96 percent, to end at 11,011.42. The Standard & Poor's 500 Index jumped 22.95 points, or 1.86 percent, to finish at 1,259.81. The Nasdaq Composite Index gained 37.49 points, or 1.83 percent, to close at 2,080.71.

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After a solid opening, the rally ignited after Bernanke told the Senate Banking Committee that he saw core inflation moderating in the coming quarters.

"Bernanke's comments on inflation make it seem the Fed is really getting close to the end of its rate-hike cycle," said Jason Schenker, U.S. economist at Wachovia Corp. in Charlotte, North Carolina. "That is more than enough to give stocks a boost."

The Commerce Department reported that its closely watched Consumer Price Index rose by just 0.2 percent in June, the smallest increase in four months and just half of the 0.4 percent May rise.

Lower oil prices added to the cheer on Wall Street, as crude oil futures briefly dipped below $72 on their way to a third straight day of declines. Just last week the price of a barrel of oil hit new record highs over $78.

Shares of JPMorgan (JPM), a Dow component, rose 5.8 percent, or $2.34, to $43.05, while Bank of America's stock added 3.1 percent, or $1.51, to $49.95 on the New York Stock Exchange. The Philadelphia Keefe Bruyette index of bank stocks climbed 3 percent.

The blue-chip Dow and the Nasdaq extended gains and rose more than 2 percent in the afternoon on news that a U.S. judge struck down a Maryland health-care law in a ruling that was favorable to Wal-Mart Stores Inc. (WMT) .

Shares of Wal-Mart, a Dow component and the world's largest retailer, rose 2.4 percent, or $1.03, to $44.20.

Still, the Dow's biggest gainer was Boeing Co. (BA). Shares of the aircraft maker and U.S. defense contractor rose nearly 4 percent, or $3.12, to $82.29 as the company and Airbus announced deals worth more than $10 billion on Wednesday.

International Business Machines Corp. (IBM) also was among the Dow's best-performing stocks, a day after the world's largest computer services company reported higher-than-expected quarterly profit. IBM shares rose 2.4 percent, or $1.81, to $76.07.

But Yahoo Inc. (YHOO) bucked the trend of positive financial results. Shares of the Internet media company tumbled after a disappointing earnings report and product delays led many Wall Street analysts to cut stock ratings and profit estimates.

Yahoo was among the Nasdaq's biggest percentage losers. It slid 21.8 percent, or $7.04, to $25.20.

Bernanke told the Senate committee that the central bank remained worried about pricey oil and tight labor markets and the risk that they might foster expectations for rising prices.

After Bernanke spoke, interest-rate futures pointed to reduced chances that the Fed will hike the benchmark fed funds rate by 25 basis points in August to 5.50 percent.

Analysts said fighting in the Middle East remained a major concern for markets because of the risk that a widening conflict could propel crude oil prices higher.

U.S. crude oil for August delivery fell 88 cents to settle at $72.66 a barrel on the New York Mercantile Exchange.

Trading was heavy on the New York Stock Exchange, where about 1.87 billion shares changed hands, above last year's daily average of 1.61 billion. On Nasdaq, about 2.37 billion shares traded, above last year's daily average of 1.80 billion.

On the NYSE, advancing shares outnumbered declining ones by a ratio of more than 6 to 1, with more than 2,900 stocks rising on the Big Board, a record for a single day.

On Nasdaq, about four stocks rose for every one that fell.

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Reuters and the Associated Press contributed to this report.