(Adds close of European markets)
* Wall St. rises, dollar slips as Yellen omits policy talk
* Oil gains as U.S. Gulf Coast braces for Hurricane Harvey
* Treasury yields dip on Yellen, ECB's Draghi in focus
By Herbert Lash
NEW YORK, Aug 25 (Reuters) - World stock markets advanced while the U.S. dollar weakened on Friday after Federal Reserve Chair Janet Yellen omitted monetary policy in a much-anticipated speech that left the possibility of a U.S. interest rate hike in December open to interpretation.
U.S. Treasury yields dipped as Yellen's speech at an annual meeting of central bankers in Jackson Hole, Wyoming, relieved some investors who had expected hawkish comments on the economy.
Reforms enacted after the financial crisis a decade ago have strengthened the banking system without impeding economic growth, and future changes should be modest, Yellen said in prepared remarks.
"She didn't say anything that the market wanted to know about Fed policy," Marc Chandler, chief global currency strategist at Brown Brothers Harriman & Co.
Yields on the 10-year U.S. Treasury note slipped and the dollar weakened because "it was not that she said anything bullish for foreign currencies; it was that she didn't say anything positive for the U.S.," Chandler said.
MSCI's index of stocks across the globe pared gains to be up 0.39 percent.
European share markets closed lower, with the pan-regional FTSEurofirst 300 index slipping 0.14 percent and the FTSE 100 index in London off 0.08 percent. MSCI's index of emerging market stocks rose 0.45 percent.
"People had hoped for some excitement. The bond market is rallying with at least some people thinking (Yellen) would make the case for more rate hikes to take some steam out of the stock market," said Chris Low, chief economist at FTN Financial in New York.
Rates futures implied traders saw a 37.2 percent chance of a rate hike at the Fed's December meeting, down from almost 39 percent on Thursday, CME Group's FedWatch tool showed.
Benchmark 10-year U.S. Treasury notes rose 7/32 in price, pushing the yield down to 2.1676 percent.
The dollar index fell 0.53 percent, with the euro rising 0.66 percent to $1.1875 and the Japanese yen gaining 0.27 percent versus the greenback at 109.26 per dollar .
The Dow Jones Industrial Average rose 71.8 points, or 0.33 percent, to 21,855.2. The S&P 500 gained 8.76 points, or 0.36 percent, to 2,447.73 and the Nasdaq Composite added 2.16 points, or 0.03 percent, to 6,273.48.
All 11 major S&P sectors rose. The S&P 500 and the Dow were on course to snap a two-week losing streak.
Also helping sentiment on Wall Street was a report that said U.S. President Donald Trump will turn his attention to his campaign promise of implementing tax reform.
National Economic Council Director Gary Cohn told the Financial Times that starting next week Trump's agenda and calendar is going to revolve around tax reform.
Mario Draghi, president of the European Central Bank, was scheduled to speak later in the afternoon at Jackson Hole.
The Atlanta Fed's GDP Now forecast model showed the U.S. economy is on track to grow at a 3.4 percent annualized pace in the third quarter based on the latest data on industrial output, home sales and durable goods orders.
Oil prices rose as the dollar fell and as the U.S. petroleum industry braced for Hurricane Harvey, which could become the biggest storm to hit the U.S. mainland in more than a decade.
U.S. crude rose 44 cents to $47.87 per barrel and Brent was last at $52.42, up 38 cents.
Reporting by Herbert Lash; Editing by Bernadette Baum and James Dalgleish