The Toronto and New York stock markets advanced as traders reacted positively to the debut appearance before Congress by the new chair of the U.S. Federal Reserve.

The S&P/TSX composite index ended the day up  86.81 points to 13,880.99 after Janet Yellen told a congressional committee that she expects a "great deal of continuity" with her predecessor, Ben Bernanke.

​Yellen signalled that she supports her predecessor's view that the economy is strengthening enough to withstand a pullback in stimulus but that rates should stay low to fuel further growth.

The Canadian dollar closed up 0.31 of a cent to 90.77 cents US  as traders also looked ahead to a new federal budget from the Conservative government after the market's close.

"The government is expected to stay the course on its path to budget surplus, opting to set the stage for new initiatives to be introduced once the government is back on positive fiscal footing in 2015/16," said RBC Economics economist Laura Cooper.

New York indexes were positive as traders looked to the question and answer session that will follow Yellen's testimony for her thoughts on inflation, the economy and wrapping up stimulus.

Investors also cheered news that Congress appears poised to raise the U.S. government's borrowing limit without the political drama that happened late last year.

 In a concession to President Barack Obama and Democratic lawmakers, House Speaker John Boehner said Tuesday the House will vote to increase the government's borrowing cap without trying to attach conditions sought by some Republicans

The Dow Jones industrials jumped 192.98 points to 15,994.77, the Standard-and-Poor's 500 index gained 19.91 points to
1,819.75 and the Nasdaq gained 43 points, or 1 per cent, to 4,191.