U.S. stocks closed mixed on Thursday as China unexpectedly cut benchmark interest rate, while the Federal Reserve Chairman Ben Bernanke's comments dampened investors'hope of further easing policies.

The Dow Jones Industrial Average gained 46.17, or 0.37 percent to close at 12,460.96. The S&P 500 index lost 0.14, or 0.01 percent to 1,314.99 and the Nasdaq Composite Index retreated 12.70, or 0.48 percent to 2,831.02.

The People's Bank of China on Thursday decided to cut benchmark rates by 25 basis points, the first time in nearly four years, in an effort to stimulate economic growth. The surprising move raised investors'confidence on the economic prospect and the expectations that other central banks will follow China's lead to launch easing monetary policies.

Following the interest rate cut, industrial stocks that rely heavily on the Chinese market for sales were among the biggest gainers on Thursday.

However, the stocks trimmed gains later after Bernanke's comments lowered investors'expectations of further monetary easing policy by the Fed.

Bernanke said in a testimony to Congress that the Fed is ready to act if the economy requires to do so. However, he noted that he still forecasts that U.S. growth will continue at a moderate pace.

The Fed's latest Beige Book showed that economic growth in the United States picked up over the two prior months and hiring showed signs of a "modest increase." The central bank also said inflation pressures appeared to be modest, in part because energy prices had declined.

However, Federal Reserve Vice Chair Janet Yellen indicated in a speech Thursday that the central bank still has some monetary policy bullets to fire.

"Mr. Bernanke was no where near as dovish sounding on Thursday as Vice Chair Yellen was,"said Art Cashin, director of floor operations for UBS.

The stock market had gained broadly on Wednesday, triggered by expectations that the central banks will take collaborative actions to battle European debt crisis and weak economic growth.

The fear on the Euro zone debt crisis continued to weigh on the market. The rating agency Fitch on Thursday cut Spain's credit rating by three notches to BBB from A, citing ballooning estimates of the cost of a banking crisis, mushrooming debt and a deepening recession.

Also, data showed that Greece's unemployment rate surged to 21. 9 percent in March, from 15.7 percent in the same month last year, adding worries of the country's possible exit from the euro zone.

On economic front, the U.S. Labor Department reported that initial jobless claims declined more than expected by 12,000 to 377,000, suggesting that the U.S. job market is recovering.