* Yellen expects Fed to hike rates later this year
* Bank stocks rise on Yellen comments
* Q2 GDP revised upwards, backing case for rate hike
* Nike jumps after results; biggest boost on the Dow, S&P
* Indexes up: Dow 1.25 pct, S&P 0.87 pct, Nasdaq 0.68 pct (Adds details, comment, updates prices)
By Tanya Agrawal
Sept 25 (Reuters) - U.S. stocks were higher in late morning trading on Friday after Federal Reserve Chair Janet Yellen said she expects interest rates to be raised this year, easing concerns about slowing global growth and prompting a rally in bank shares.
Nike's surprisingly strong results in China pushed its shares up nearly 10 percent to a record high, giving the biggest boost to the Dow and the S&P.
Data showing that the U.S. economy expanded more than previously estimated in the second quarter added to the positive tone and backed the case for a rate hike before the end of 2015.
Yellen said on Thursday that she and other policymakers do not expect recent global economic and financial market developments to significantly affect the Fed's policy.
Nine of the 10 major S&P sectors were higher, led by the financial index's 1.54 percent gain - its biggest in 2-1/2 weeks.
"Yellen's speech gave a little bit of clarity to the markets," said Robert Pavlik, chief market strategist at Boston Private Wealth in Palm Beach Gardens, Florida.
"That put the market in a slightly better mindset. It understands what the Fed is going to be doing because the last FOMC meeting had left people scratching their heads."
Federal fund futures contracts showed traders were pricing in more than a 50 percent chance of a rate hike by the end of this year.
At 10:57 a.m. ET (1457 GMT) the Dow Jones industrial average was up 202.17 points, or 1.25 percent, at 16,403.49. The S&P 500 was up 16.79 points, or 0.87 percent, at 1,949.03 and the Nasdaq composite was up 32.02 points, or 0.68 percent, at 4,766.50.
Markets have been skittish since last Thursday, when Yellen cited concerns about slowing global growth as a key reason for holding off from a much-anticipated hike. Since then, the S&P 500 had fallen about 3 percent through Thursday's close.
The CBOE Volatility index, known as Wall Street's "fear gauge", fell 6.9 percent to 21.84, but remained above its long-term average of 20.
Data on Friday showed stronger construction and consumer spending helped U.S. gross domestic product rise at a 3.9-percent annual pace in the April-June quarter, up from the 3.7-percent pace reported last month.
Consumer sentiment rose to 87.2 in September, better than the median forecast of 86.7.
Nike jumped 9.6 percent to a record high of $125.82 after its quarterly profit topped expectations on strong growth in China.
Bank of America, JPMorgan, Citigroup and Wells Fargo were up between 2.0 percent and 2.6 percent.
Apple was up 0.5 percent at $115.61 as its new iPhones went on sale on Friday.
Pier 1 Imports slumped 19.2 percent to a 5-year low of $7 after the home decor and furniture importer's results missed expectations.
Advancing issues outnumbered decliners on the NYSE by 1,893 to 977. On the Nasdaq, 1,384 issues rose and 1,263 fell.
The S&P 500 recorded four new 52-week highs and three new lows, while the Nasdaq recorded 36 new highs and 65 new lows. (Reporting by Tanya Agrawal in Bengaluru, additional reporting by Abhiram Nandakumar; Editing by Savio D'Souza)