* Yellen says to raise rates at an upcoming meeting
* Dollar, Treasury yields, bank stocks gain
* Bond proxy sectors, utilities and real estate, drop
* Apple hits all-time high; top stock on S&P, Nasdaq
* Indexes up: Dow 0.29 pct, S&P 0.23 pct, Nasdaq 0.21 pct (Updates to early afternoon)
By Yashaswini Swamynathan
Feb 14 (Reuters) - Wall Street reversed course to eke out small gains on Tuesday, led by bank stocks after Federal Reserve Chair Janet Yellen said it would be unwise to wait too long to raise interest rates.
Apple rose about 1 percent to hit an all-time high of $134.59, helping the three major indexes to hit fresh record highs for the fourth day in a row.
Yellen said delaying rate hikes could force the central bank to raise rates quicker down the line, which could risk a recession. She also expressed uncertainty over economic policy under the Trump administration.
President Donald Trump’s pro-business stance sparked a record-setting rally in stocks. However, he has given scant detail on his policies, giving the Fed limited visibility on the direction of the economy.
“It is too early to know what policy changes will be put in place or how their economic effects will unfold,” Yellen said.
Yellen did not say if the Fed still planned to raise rates thrice this year, nor did she give indications whether a hike might come in March or in June, as most analysts expect.
“This doesn’t mean they will move in March, but the Fed wants to have the option to move,” said Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington.
“The market seems to be under-pricing a upcoming rate hike.”
At 13:08 a.m. ET (1808 GMT), the Dow Jones Industrial Average was up 59.34 points, or 0.29 percent, at 20,471.5.
The S&P 500 was up 5.53 points, or 0.23 percent, at 2,333.78 and the Nasdaq Composite was up 12.19 points, or 0.21 percent, at 5,776.14.
Yellen’s comments lifted the dollar and U.S. Treasury yields. The S&P financial sector, which has led the “Trump rally”, was up 0.83 percent.
Bank stocks were the top gainers on the S&P. Goldman Sachs rose 1.2 percent and helped the Dow hit a record intraday high. The KBW banking index increased 1.3 percent.
Eight of the 11 major S&P sectors were lower, led by the utilities and real estate sectors, which tend to fall when treasury yields rise.
General Motors was the biggest percentage gainer on the S&P, rising 4.6 percent after Peugeot-owner PSA Group said it is in talks to buy GM’s European Opel business.
The prospects of sector consolidation caused Fiat to jump 4.3 percent, while Ford gained 0.6 percent.
Declining issues outnumbered advancers on the NYSE by 1,625 to 1,254. On the Nasdaq, 1,450 issues rose and 1,340 fell.
The S&P 500 index showed 53 new 52-week highs and no new lows, while the Nasdaq recorded 106 new highs and 16 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)