* Fed projects slower path of rate hikes than expected in Dec
* Bank stocks worst-hit after Yellen comments
* Indexes up: Dow 0.41 pct, S&P 0.50 pct, Nasdaq 1.03 pct (Adds details, changes comment)
By Abhiram Nandakumar
March 29 (Reuters) - Wall Street swung into positive territory on Tuesday after U.S. Federal Reserve Chair Janet Yellen said the central bank should proceed “cautiously” on raising interest rates.
Global developments and risks have led policymakers to project slower path of rate hikes than initially expected in December, Yellen said.
In her first comments after the Fed held steady on rates earlier this month, Yellen said global risks remained, including uncertainty over China and low oil prices.
“They were moderate remarks and the markets like what they are hearing,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
“She’s basically throwing a little cold water on the said ‘hawkishness’ that the market was worried about last week.”
The Fed has said it will depend on economic data for a decision on rates, but several policymakers have voiced support for more than one increase this year.
At 12:53 p.m. ET (1653 GMT), the Dow Jones industrial average was up 72.11 points, or 0.41 percent, at 17,607.5, the S&P 500 was up 10.13 points, or 0.5 percent, at 2,047.18 and the Nasdaq Composite was up 48.99 points, or 1.03 percent, at 4,815.78.
The U.S. Treasury market rallied with yields hitting multi-week lows, while the dollar weakened after Yellen’s comments.
Eight of the 10 major S&P sectors were higher. The S&P financial sector fell 0.31 percent.
Shares of banks, which stand to gain from higher interest rates, were the biggest drags on the S&P.
Bank of America was down 2.3 percent, while Wells Fargo, JPMorgan and Citigroup declined more than 1 percent.
A 2 percent fall in crude prices weighed on the energy sector, which was down 0.68 percent.
Advancing issues outnumbered decliners on the NYSE by 2,098 to 830. On the Nasdaq, 1,872 issues rose and 839 fell.
The S&P 500 index showed 29 new 52-week highs and one new low, while the Nasdaq recorded 44 new highs and 40 new lows. (Reporting by Yashaswini Swamynathan and Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty)