GLOBAL MARKETS-Stocks advance on Trump policy bets; S&P tops $20 trillion

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* Financials lead Wall Street higher

* European stocks touch highest level since Dec (Shanghai: 600875.SS - news) . 2015

* U.S. Treasury yields fall ahead of Yellen testimony

By Chuck Mikolajczak

NEW YORK, Feb 13 (Reuters) - A gauge of global equity markets advanced on Monday and bond yields rose, buoyed by a reemergence of assets likely to benefit from reflationary policies that are expected to be implemented by U.S. President Donald Trump.

Financials and banks in particular led equities on Wall Street higher as investors bet Trump's tax reform plans and softer regulatory environment will boost economic growth and corporate profits.

Comments from Trump on Thursday that he plans to announce what he said would be the most ambitious tax reform plan since the Reagan era in the next few weeks rekindled hopes for big tax cuts while the announced resignation of the Fed's top bank regulator on Friday heightened expectations for a loosening of rules on banks.

"At some point there has to be actions that match the words and I think we are getting closer to that point," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management.

Investors were also encouraged by the two-day U.S.-Japan summit held over the weekend apparently having ended smoothly without Trump talking tough on trade, currency or security issues.

Canadian Prime Minister Justin Trudeau and Trump opened talks at the White House on Monday, with Trudeau seeking to nurture economic ties while avoiding tensions over issues such as immigration.

The Dow Jones Industrial Average rose 156.34 points, or 0.77 percent, to 20,425.71, the S&P 500 gained 14.02 points, or 0.61 percent, to 2,330.12 and the Nasdaq Composite added 33.06 points, or 0.58 percent, to 5,767.18.

The advance put the S&P 500's market capitalization above the $20 trillion mark for the first time.

MSCI (Frankfurt: 3HM.F - news) 's all-country world index advanced 0.56 percent and was on track for its fourth straight advance. Europe's broad FTSEurofirst 300 index gained 0.76 percent to close at its highest level since December 2015.

U.S. Treasury yields rose as investors looked ahead to testimony by Federal Reserve Chair Janet Yellen on Tuesday and Wednesday when the Fed Chair gives her semiannual Humphrey Hawkins (NasdaqGS: HWKN - news) testimony before lawmakers in Washington.

Benchmark 10-year notes were last down 7/32 in price to yield 2.4341 percent, up from 2.41 percent late on Friday.

The dollar was up 0.14 percent against a basket of major currencies, after touching its highest level in almost three weeks, on expectations the reflationary policies would stoke economic growth and the possibility the Fed could be more aggressive in hiking interest rates.

In commodities, copper hit its highest levels since May 2015 after shipments from Chile (Stuttgart: 704599.SG - news) and Indonesia, the world's two biggest copper mines, were disrupted.

The metal last traded at $6,125 per tonne, up 0.57 percent on the day after climbing as high as $6,204. On Friday it jumped more than 4 percent, its biggest one-day rise in almost four years.

Oil prices pulled back from strong gains registered on Friday as the dollar strengthened and signs of rising U.S. crude output pressured prices.

International benchmark Brent crude futures fell 2.1 percent to $55.51 per barrel and U.S. crude lost 1.9 percent to $52.82.

(Additional reporting by Yashaswini Swamynathan; Editing by Bernadette Baum and Nick Zieminski)