* Wall St above record closing high
* Russian ruble hits 5-year low vs dollar
* Euro bounces off 2-week low
* U.S. Treasuries' yields at two-week low
* Yuan rebounds but still below PBOC fixing
NEW YORK, Feb 27 (Reuters) - Stocks on world markets advanced on Thursday, reversing early declines as comments from U.S. Federal Reserve Chair Janet Yellen offset concerns over tension in Ukraine and Russia.
Yellen signaled the central bank was likely to stay the course in its current plan to scale back its stimulus measures and said the Fed would be on alert to make sure recent signs of weakness in the U.S. economy are due to cold weather and storms, not signals of a more fundamental slowdown.
"Markets are showing some relief that monetary policy may remain loose and that the Fed is clearly taking a pragmatic view quarter by quarter," said Lorne Baring, managing director of B Capital Wealth Management in Geneva.
But advances were muted as a result of increased saber-rattling in the Ukraine, as armed men seized the parliament in Ukraine's Crimea region and raised the Russian flag, alarming Kiev's new rulers, who urged Moscow not to abuse its navy base rights on the peninsula by moving troops around.
The White House warned Russia to respect Ukraine's sovereignty and territorial integrity and told Moscow to avoid "provocative" actions with regard to the crisis-hit country.
The Russian ruble touched a five-year low against the dollar , while Ukraine's hryvnia fell to a record low after its central bank abandoned its managed exchange rate policy.
The geopolitical uncertainty caused investors to seek the safety of U.S. Treasuries, driving yields to two-week lows. The 10-year note was yielding 2.655 percent.
The Japanese yen and Swiss franc, both traditional safe-haven plays in foreign exchange, gained.
"There are definitely fears about geopolitics; the general mood toward emerging markets is not great. The concern is this could develop into a proper civil war in Ukraine that splits the country," said Manik Narain, strategist at UBS in London.
Wall Street advanced modestly and was once again above its all-time closing high of 1,848,38 set on Jan. 15 after Yellen's comments and an unexpected rise in durable goods orders, excluding transportation. The index has been unable to hold above the record despite several attempts this week.
"Durables came in better than feared, but it is difficult to tell what the weather impact was and what the impact of an actual slowdown might be," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management in New York.
If the view holds that harsh winter weather is to blame, investors are likely to expect the Fed to keep trimming its bond-buying program by $10 billion at each policy meeting, leaving it on track to end the purchases completely by the end of the year.
The Dow Jones industrial average rose 72.41 points, or 0.45 percent, at 16,270.82. The Standard & Poor's 500 Index was up 8.49 points, or 0.46 percent, at 1,853.65. The Nasdaq Composite Index was up 29.32 points, or 0.68 percent, at 4,321.39.
The MSCI world equity index, which tracks shares in 45 nations, gained 1.20 points, or 0.29 percent, to 407.16.
Yellen's testimony curbed declines in Europe, with the FTSEurofirst 300 index, closing down 0.2 percent after an earlier fall of 1 percent and the euro gained 0.2 percent to $1.371 after it dropped to a two-week low of $1.3641.
Aside from tensions in Ukraine, declines in Europe were stemmed by a downward revision to Spain's fourth-quarter gross domestic product and ECB data that showed little improvement in the amount of credit reaching euro-zone firms.
German inflation figures suggested there would be scant pick-up in euro-zone inflation, due on Friday.
The ECB meets next week and is under pressure to cut interest rates again and dip back into its unconventional policy cupboard to ensure the euro zone does not become mired in deflation.
In bond markets, the possibility that more moves are coming from the ECB and a strong debt auction in Italy helped lower-rated Italian and Spanish debt keep pace with safe-haven German Bunds.
Copper dropped to a three-month low below $7,000 a tonne, extending its losses over the past week on recent concerns about slower growth in China.
Gold prices edged up due to a steady dollar but remained well below the previous day's four-month high as buyers of coins, bars and jewelry in Asian markets held off in expectation of a further price drop. Spot gold advanced 0.1 percent $1,333.10 an ounce, off Wednesday's high of $1,345.35.
After recent falls, the yuan steadied for a second day, trading at 6.1279 per dollar, just off Wednesday's low of 6.1351. A bounce in Chinese shares helped Asian shares gain 0.3 percent.
Dealers suspect the People's Bank of China has engineered the recent decline in the country's currency to inject more two-way volatility into the market and offset speculators who had bet on its continued rise.