While you were sleeping: UPDATED Stocks extend record run as Yellen speaks

Wall Street continued its record-setting streak while the US dollar also gained after Federal Reserve chairwoman Janet Yellen signalled further interest rate increases ahead.

"At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," Ms Yellen told the Senate Banking Committee.

The Federal Open Market Committee begins its next two-day policy meeting on March 14.

"I can't tell you which meeting it would be," Ms Yellen said, including specifying "whether it's March or May or June," according to Reuters.

"Waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession," she said.

She warned that changes in fiscal policy or other economic policies could potentially affect the economic outlook.

"Of course, it is too early to know what policy changes will be put in place or how their economic effects will unfold," she noted.

"While it is not my intention to opine on specific tax or spending proposals, I would point to the importance of improving the pace of longer-run economic growth and raising American living standards with policies aimed at improving productivity."

Dow advances 92 points
Wall Street continued to moved higher in its record-breaking run. At the close of trading in New York, the Dow Jones Industrial Average added 92.25 points, or 0.45%, to 20,504.41. The Nasdaq Composite Index gained 0.3% to 5782.57 and the Standard & Poor's 500 Index increased 0.4% to 2337.58.

All three benchmarks touched fresh record closing highs. 

"This doesn't mean they will move in March, but the Fed wants to have the option to move," Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington, told Reuters. "The market seems to be under-pricing an upcoming rate hike."

The Dow climbed, led by gains in Goldman Sachs and JPMorgan Chase shares, up 1.5% and 1.3% respectively. Apple shares touched a record high, up 1.3% at $US135.01, amid bets its next iPhone model will bolster sales.

US Treasurys declined, pushing the yield on the 10-year note to 2.47%.

In Europe, the Stoxx 600 Index ended the session with a 0.1% increase from the previous close, underpinned by gains in car makers. The UK's FTSE 100 Index slipped 0.1% and Germany's DAX Index edged 0.02% lower. France's CAC 40 Index added 0.2%, bolstered by shares in Peugeot.

PSA Group, the maker of Peugeot and Citroen cars, is exploring an acquisition of General Motors' European business, Bloomberg reported.

(BusinessDesk)