* U.S. bond yields ease further from peaks
* Focus on Fed chief's testimony this week
* Berkshire Hathaway gains on Buffett's buyback comments
* Indexes up: Dow 1.6 pct, S&P 1.2 pct, Nasdaq 1.2 pct (Updates to close)
By April Joyner
NEW YORK, Feb 26 (Reuters) - U.S. stocks rose to more than three-week highs on Monday, recovering much of the losses sustained in a sell-off earlier this month, as a decline in Treasury yields assuaged investor concerns about rising interest rates and refocused attention on economic growth.
All three major indexes rose more than 1 percent. The S&P 500 is now just 3.2 percent below its peak on Jan. 26. The CBOE Volatility Index also dipped slightly to 15.8, though it remains above levels seen before the S&P's peak.
The U.S. 10-year Treasury note yield eased to 2.8642 percent , slipping from a four-year high it hit last week. On Friday, the Federal Reserve said it expected economic growth to remain steady and saw no serious risks on the horizon that might alter its planned pace of interest rate hikes.
"It provides some relief that yields aren't just going straight up," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "Overall, earnings numbers continue to move higher. Investors still have confidence in the global economy."
The major indexes fell from late-January peaks on concerns that rising inflation could cause the Fed to raise rates more than three times this year, as its previous statements indicated.
Investors will scrutinize testimony starting on Tuesday from Fed chairman Jerome Powell who faces questions from both houses of the U.S. Congress in his first major set piece since he took over from Janet Yellen this month.
The Dow Jones Industrial Average rose 399.28 points, or 1.58 percent, to 25,709.27, the S&P 500 gained 32.3 points, or 1.18 percent, to 2,779.6 and the Nasdaq Composite added 84.07 points, or 1.15 percent, to 7,421.46.
Among the leading S&P 500 sectors were technology, which gained 1.6 percent, industrials, which rose 1.4 percent, and financials, which added 1.5 percent. The broad gains across those cyclical sectors reflect investors' focus on economic strength, Lerner said.
Qualcomm was up 5.8 percent after the chipmaker urged Broadcom to enter into price negotiations for the first time on Broadcom's $117 billion offer for the company.
Berkshire Hathaway gained 4.0 percent after Warren Buffett said his conglomerate, which is sitting on $116 billion of cash, is "more inclined" to repurchase stock than pay dividends as a means to use excess cash.
Advancing issues outnumbered declining ones on the NYSE by a 2.04-to-1 ratio; on Nasdaq, a 1.91-to-1 ratio favored advancers.
The S&P 500 posted 31 new 52-week highs and one new low; the Nasdaq Composite recorded 105 new highs and 36 new lows.
Volume on U.S. exchanges was 6.3 billion shares, well below the 8.36 billion average over the last 20 trading days. (Additional reporting by Sruthi Shankar in Bengaluru; Editing by Nick Zieminski and James Dalgleish)