GLOBAL MARKETS-Dollar strength continues after Yellen comments, stocks dip

* European stocks hold near 3-month high,
* Euro hits fresh 7-1/2 month low
* Dollar hits highest level since March 2003

(Adds Yellen comments, close of European markets)
By Chuck Mikolajczak
NEW YORK, Dec 2 (Reuters) - The dollar extended gains on
Wednesday and stocks dipped on Wall Street, as Federal Reserve
Chair Janet Yellen signaled a readiness to hike interest rates
and investors took in U.S. data that indicated a strengthening
labor market.
Yellen said she was "looking forward" to a U.S. interest
rate hike that will be seen as a testament to the economy's
recovery from recession.
"There could be events I suppose, terrorism or otherwise,
that could make you postpone, but I think the certainly of (a
rate hike) is up over the 90 percent mark," said Rick Meckler,
president of investment firm LibertyView Capital Management in
Jersey City, New Jersey.
"The Fed has given investors a lot of time and a lot of
direction that they plan to do this, if it is coming as a
surprise to you now, you just haven't been following this."
U.S. private employers boosted hiring in November. The ADP
National Employment Report showed private payrolls increased
217,000 last month while a separate report showed nonfarm
productivity grew at a faster pace than previously thought in
the third quarter.
The U.S. dollar index .DXY extended gains after Yellen's
remarks to a high of 100.51, its highest level since March 2003.
European stocks pared gains late but managed to hold near a
3-1/2-month high and the euro EUR= hit a 7-1/2-month low in
the wake of Yellen's comments and on expectations the European
Central Bank will engage in more stimulus after its meeting on
Thursday.
The Dow Jones industrial average .DJI fell 38.01 points,
or 0.21 percent, to 17,850.34, the S&P 500 .SPX lost 7.25
points, or 0.34 percent, to 2,095.38 and the Nasdaq Composite
.IXIC added 8.13 points, or 0.16 percent, to 5,164.44.
MSCI's all-country world index .MIWD00000PUS of equity
performance in 46 countries shed 0.36 percent. The pan-European
FTSEurofirst .FTEU3 edged up 0.01 percent.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets in 2015 http://link.reuters.com/dub25t
Currencies vs dollar http://link.reuters.com/tak27s
Commodities performance http://link.reuters.com/rac73w
The dollar before and after rate hikes http://reut.rs/1PuuPZI
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>