(Recasts with market moves on Yellen remarks; changes dateline from LONDON; changes throughout)
* Wall St gains as Yellen says rate-hike case strengthens
* Dollar at 1-week high vs yen, euro
* Yellen tone seen slightly hawkish, but no timeline given
* Treasury prices gain as rate hike seen as uncertain
By Hilary Russ
NEW YORK, Aug 26 (Reuters) - U.S. equities gave up early gains on Friday, hurt by a surging U.S. dollar after Federal Reserve Chair Janet Yellen said that the case for raising U.S. interest rates has strengthened in recent months.
European stocks advanced, however, while oil and Treasury prices came off highs as investors across asset classes parsed the details of Yellen's presentation, markets' central focus of the week.
In her much-awaited speech during an international gathering of central bankers in Jackson Hole, Wyoming, Yellen did not indicate when the U.S. might hike rates, but her comments reinforced the view that such a move could come later this year. The Fed has policy meetings scheduled in September, November and December. dollar's reaction was almost instantaneous - it rallied pretty quickly off her hawkish comments," said Minh Trang, senior FX trader at Silicon Valley Bank in Santa Clara, California.
"The overall takeaway, not just from Yellen but for the week, is that all the Fed officials - the voter and no-voter alike - have all taken a hawkish bent. The only downside I see is that there are only three meetings left this year and time is running out. Given the Fed's history, it's difficult to see them hiking more than once this year."
The greenback .DXY hit 1-week highs against the euro and yen and was last up 0.5 percent at $95.232 versus a basket of major currencies. comments from other Fed officials have raised expectations of a U.S. rate hike this year, though markets are not fully pricing one in until 2017.
On Thursday, San Francisco Fed President John Williams and Kansas City Fed President Esther George defended the need to raise rates, albeit gradually, to keep the U.S. economy from overheating. the dollar's advance, oil prices turned marginally lower despite reports of Yemeni missiles hitting Saudi Arabia's oil facilities. crude futures LCOc1 was trading at $49.58 a barrel. West Texas Intermediate (WTI) crude CLc1 dipped slightly to $47.31 per barrel.
The Dow Jones industrial average .DJI fell 75.4 points, or 0.41 percent, to 18,373.01, the S&P 500 .SPX lost 6.11 points, or 0.28 percent, to 2,166.36 and the Nasdaq Composite .IXIC dropped 11.83 points, or 0.23 percent, to 5,200.38nL3N1B7485]
European stocks closed higher with a late boost from Yellen's remarks. The pan-European STOXX 600 .STOXX closed up 0.56 percent. zone government bond yields, including Germany's 10-year bond DE10YT=TWEB , fell after Yellen remained vague on timing and were down overall on the day. Treasuries extended price gains as investors saw the Fed as unlikely to raise rates at its September meeting, with yields on the 30-year bonds US30YT=RR falling to 2.22 percent.