* Yellen's comment boosts dollar, Treasury yields
* Stocks down after data, Yellen hints at Dec. rate hike
* Asia rally spills over the Europe despite earnings misses
* Energy sector stocks reverse course as oil prices tumble (Updates throughout, adds commentary)
By Sinead Carew
NEW YORK, Nov 4 (Reuters) - Wall Street stocks, unable to follow a rally in European and Asian stocks on Wednesday, fell further after Federal Reserve Chair Janet Yellen said the U.S. economy is "performing well" and could justify an interest rate hike in December.
The U.S. dollar and U.S. Treasury yields moved higher after Yellen's comments, building on a rise that followed earlier data showing stronger-than-expected private-sector U.S. job growth.
Yellen told Congress the Fed expects the economy to continue to grow at a pace that returns inflation to policy-makers' target and that "if the incoming information supports that expectation ... December would be a live possibility" for a rate increase at the Fed's next policy-setting meeting.
U.S. stocks, already down after the data, took a deeper dive after Yellen's comments. While a rate hike should signal economic strength, traders often balk at the prospect as higher rates would make equities less attractive than bonds to some investors and would increase borrowing costs for companies.
"It's been a real soap opera for the markets about whether the Fed is going to move or aren't they going to move," said Scott Brown, chief economist at Raymond James in Florida.
At 2:27 p.m. EST (1927 GMT), the Dow Jones industrial average fell 42.16 points, or 0.24 percent, to 17,875.99, the Standard & Poor's 500 index lost 7.7 points, or 0.36 percent, to 2,102.09 and the Nasdaq Composite dropped 3.18 points, or 0.06 percent, to 5,141.95.
U.S. two-year Treasury note yields hit 0.8200 percent, their highest level since April 2011. Three-year yields hit 1.1484 percent, their highest in four months, while five-year yields hit 1.6520 percent, their highest in roughly three months.
The U.S. dollar index was up 0.9 percent against a basket of major currencies while the euro fell about 1.1 percent against the dollar.
U.S. private employers maintained a steady pace of hiring in October and the trade deficit hit a seven-month low in September as exports rebounded. ADP reported 182,000 new private sector jobs compared with a 180,000 forecast.
The S&P 500 drop was led by 1.6 percent decline in the energy sector that ended a five-day rally.
Oil prices fell sharply, erasing much of the previous day's gains as the dollar strengthened, gasoline prices tumbled and U.S. crude inventories rose. Also an internal OPEC document published by Reuters showed weaker oil demand in the next few years, even as Saudi Arabia pumped near record levels to protect market share.
Brent crude futures were down 3.7 percent at $48.68 a barrel, while U.S. crude fell 3.3 percent to $46.33.
Gold fell to its lowest point in more than a month, in its sixth straight session of losses, as a rising dollar and talk of a near-term hike in U.S. interest rates kept the precious metal under pressure.
The FTSEurofirst 300 index of major companies was up 0.4 percent, after earlier reaching its highest point since August 19.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.26 percent after comments from China's president on the economy and Beijing's proposed five-year plan. (Additional reporting by Richard Leong, Sam Frogione and Dion Rabouin in New York, Abhiram Nandakumar in Bengaluru; Editing by Alison Williams, Chizu Nomiyama and Richard Chang)