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Dow closes within 100 points of all-time high

Stocks soared for a second day to finish near session highs Wednesday, with the Dow within less than 100 points of an all-time closing high, boosted by upbeat earnings and economic reports and as Fed Chairman Ben Bernanke reaffirmed his support of the central bank's stimulus policy.

"It would not be shocking to see a final push through, but I want to point out that seasonality is not necessarily on our side, which keeps us from going pedal to the medal," said Josh Brown, financial advisor at Fusion Analytics. "We had a very similar market environment in early 2011 and last year. So it would not shock me to see a sprint close to the highs of the year, have our typical pullback, and when people realize that sequestration is not the end of the world, we could resume. That would be a better moment to load on new longs."

The Dow Jones Industrial Average soared 175.24 points, or 1.26 percent, to close at 14,075.37, propelled by JPMorgan and Caterpillar. The Dow is now less than 100 points from hitting its all-time closing high of 14,164.53.

The S&P 500 jumped 19.05 points, or 1.27 percent, to finish at 1,515.99. And the Nasdaq advanced 32.61 points, or 1.04 percent, to end at 3,162.26.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, tumbled below 15.

All 10 key S&P sectors finished firmly in positive territory, led by materials and industrials.

Read More: Cramer: These Stocks Are 'Rising From the Ashes'

"So much for last week's Fed Minutes; did the market forget who the chief cook and bottle washer is?" wrote Elliot Spar, market strategist at Stifel Nicolaus. "If they did, Ben has set them straight and the market loves it. Those that bailed last week and again on the worry over the elections in Italy now find themselves underperforming."

In his second day of testimony before Congress, Federal Reserve Chairman Ben Bernanke said that the nation's unemployment rate probably won't reach the 6 percent level until 2016, giving further support for the central bank's easy monetary policy and warned Congress against letting looming spending cuts take place.

Stocks recovered their losses from earlier this week after being rocked by Italy's election results. All three major averages are now in positive territory for the week.

"We're in a sideways process with the Dow around 14,000 and we'll probably be around here for a while," said Jeff Kleintop, chief market strategist at LPL Financial. "Profit and economic growth may be softer in Europe and we're probably due for a pullback, but I don't think it's going to be a big one. You want to buy into the dips and put capital to work."

Read More: Why You May Suffer From the 'Sequester Blahs'

Apple remained in the red as tech giant's CEO Tim Cook dismissed hedge fund manager David Einhorn's lawsuit against the company as being a "silly sideshow," but said the iPhone maker is "seriously considering" ways to return cash to shareholders. Apple is currently sitting on more than $137 billion in excess cash.

Read More: Apple $800? What Was I Thinking?!

"I don't like it either," Cook said of Apple stock's 35-percent plunge since hitting an all-time high last September, but urged shareholders to focus on the longer term, adding that 2012 had been "an incredible year of innovation" at the company.

Flower Foods climbed after the packaged bakery goods company won the bid for Hostess Wonder bread in a deal worth $360 million, CNBC learned.

Among retail earnings, Target posted quarterly results that topped expectations for the holiday quarter. But shares gave up their initial gains amid investor concern over the company's ability to reach its forecast, given its large-scale expansion plans in Canada.

Dollar Tree soared to lead the S&P 500 gainers after the discount retailer posted earnings and revenue that edged past expectations. And TJX rose after the parent company of TJMaxx reported quarterly results that beat Wall Street expectations. In addition, the company announced a dividend hike and a new share repurchase program.

Coach jumped amid unconfirmed reports that the upscale retailer is exploring a sale of itself. Separately, the retailer said it has hired a former Nike executive to oversee the transformation of its stores.

First Solar plunged nearly 15 percent after the solar panel maker posted revenue and outlook that fell short of Wall Street expectations. In addition, Baird cut its rating on the company to "neutral" from "outperform" and lowered its price target to $25 from $30.

Groupon, Limited Brands and JCPenney are among notable companies slated to post earnings after the closing bell.

European shares closed higher, thanks to a successful bond auction in Italy.

On the economic front, pending home sales jumped in January, hitting its highest since April 2010, according to the National Association of Realtors. Meanwhile, weekly mortgage applications declined for a third-consecutive weekeven as rates eased, according to the the Mortgage Bankers Association.

(Read More: Housing May Not Be as Healthy as It Looks: NAHB Pro)

Durable goods orders declined in January, according to the Commerce Department. But excluding transportation, durable goods orders posted its biggest gain since December 2011.

Treasurys remained flat after the government auctioned $29 billion in 7-year notes a a high yield of 1.26 percent. The bid-to-cover ratio, an indicator of demand, was 2.65.