* Stocks reverse earlier gains, Nasdaq down >1%

* U.S. retail sales breezes past expectations

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

NEW YORK, April 15 (Reuters) - Wall Street turned lower amid rising U.S. Treasury yields as simmering tensions in the Middle East helped curb investor risk appetite.

The three major U.S. stock indexes reversed initial gains to extend Friday's sell-off, while the yen fell to its lowest level since 1990, reviving intervention fears.

U.S. retail sales data for March blew past analyst expectations, provided the latest evidence in the case for the resilience of the American consumer but also suggested the U.S. Federal Reserve could hold off on cutting its key policy rate for longer than previously anticipated.

"Market expectations have transitioned from three expected rate cuts this year down to fewer than two," said Bill Merz head of Capital Market Research at U.S. Bank Wealth Management in Minneapolis. "That’s the concern that markets are reflecting while the equity rally has stalled in recent weeks."

On the geopolitical front, over the weekend Iran launched a missile and drone attack against Israel in retaliation for a suspected attack on its embassy, and calls for restraint regarding Israel's response appeared to be calming helping tensions in the region.

"I would say that the level of uncertainty is higher than it was a week ago on the geopolitical stage and it’s understandable to see higher market volatility in the current environment," Merz added.

The Dow Jones Industrial Average fell 282.93 points, or 0.74%, to 37,700.31, the S&P 500 lost 61.94 points, or 1.21%, to 5,061.47 and the Nasdaq Composite dropped 277.99 points, or 1.72%, to 15,897.10.

European shares ended modestly higher as weak energy shares capped gains in industrial stocks, while cautions investors kept close watch on developments in the Middle East.

The pan-European STOXX 600 index rose 0.13% and MSCI's gauge of stocks across the globe shed 1.01%.

Emerging market stocks lost 1.15%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.09% lower, while Japan's Nikkei lost 0.74%.

Yields for 10-year U.S. Treasuries rose, hitting their highest level since November after a robust Retail Sales report suggested the Fed could hold its key policy rate in restrictive territory for longer than expected.

Benchmark 10-year notes last fell 31/32 in price to yield 4.626%, from 4.499% late on Friday.

The 30-year bond last fell 66/32 in price to yield 4.7385%, from 4.603% late on Friday.

The dollar edged higher against a basket of world currencies, building on last week's five-month high as the yen dipped to a 34-year trough.

The yen move helped revive anticipation of the possibility of intervention on the part of Japanese authorities.

The dollar index rose 0.14%, with the euro down 0.17% to $1.0624.

The Japanese yen weakened 0.58% versus the greenback at 154.21 per dollar, while Sterling was last trading at $1.2441, down 0.07% on the day.

Crude oil prices dipped and then sharply pared their losses as investors parsed supply risk arising from geopolitical turmoil.

U.S. crude dipped 0.29% to settle at $85.41 per barrel, while and Brent settled at $90.10 per barrel, down 0.39% on the day.

Gold surged more than 1%, as the safe-haven metal extended its rally after reaching an all-time high in the previous session.

Spot gold added 1.2% to $2,372.39 an ounce.

(Reporting by Stephen Culp; Additional reporting by Marc Jones in London; Editing by Marguerita Choy and Aurora Ellis)