GLOBAL MARKETS-Stocks rise, oil gains as Crimea remains in focus

Fri Mar 21, 2014 3:29pm EDT

* Fed speakers eyed for more clues to U.S. policy moves

* Stocks buoyed as fear of further Ukraine tensions ebb

* Oil prices rise on fear of supply disruption over Crimea (Adds close of European bond, stock markets)

By Herbert Lash

NEW YORK, March 21 (Reuters) - World markets steadied on Friday after a volatile week driven by speculation over shifts in U.S. monetary policy, with equities around the globe on the rise and the euro up against the dollar, while crude oil rose on fear of supply disruptions over Crimea.

Stocks on Wall Street traded near break-even after the benchmark S&P 500 index earlier in the session hit a record intra-day high as equities were boosted by Moscow's assertion that no other Ukrainian region would be subject to intervention.

But Brent crude rose to just below $107 a barrel as U.S. sanctions against Russia, the world's second-largest oil exporter, kept fears of a supply disruption alive.

Brent remained on track for a fourth weekly loss, however, and President Vladimir Putin signed laws completing Russia's annexation of Crimea on Friday.

European shares logged their biggest weekly gain in a month, supported by a rally in basic resources stocks and some positive technical buying signals.

The European basic resources index rose 1.1 percent, extending gains on expectations China would support its economy after Premier Li Keqiang said on Thursday the world's top metals consumer will speed up investment and construction plans to ensure domestic demand expands at a stable rate.

Early strength in Europe helped MSCI's all-country world equity index trade up 0.35 percent. The euro zone's blue-chip Euro STOXX 50 index rose 0.25 percent after a major options expiry, and the pan-regional FTSEurofirst 300 closed up 0.1 percent at 1,307.24.

"The elements for the continuation of the current rally are on the table. The market is not cheap but not extremely expensive either and economic growth is going to be decent," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

"If you believe in the scenario of a gradual economic upturn, you should play the sectors that benefit from that and invest in stocks such as basic resources and banks," he said.

A Reuters poll on Thursday forecast European stocks will extend their rally in 2014, fueled by a long-awaited rebound in corporate profits as the region's economy picks up and global investors shift from emerging markets to Europe.

The Dow and S&P 500 were on track for their best weekly performance since mid-February, but some analysts said equities are vulnerable to U.S.-Russian tensions. U.S. stocks retreated as investors exercised caution heading into the weekend.

The Dow Jones industrial average rose 19.53 points, or 0.12 percent, to 16,350.58. The S&P 500 lost 2.99 points, or 0.16 percent, to 1,869.02 and the Nasdaq Composite dropped 39.097 points, or 0.91 percent, to 4,280.189.

"We are hitting our heads at the closing highs around the 1875 area, this is the area where you would find some resistance and that seems to be exactly what happened," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

On Wall Street, the Dow Jones industrial average rose 60.79 points, or 0.37 percent, to 16,391.84. The S&P 500 gained 2.57 points, or 0.14 percent, to 1,874.58, and the Nasdaq Composite dropped 19.046 points, or 0.44 percent, to 4,300.24.

Companies tied to the pace of economic growth were among the biggest gainers, with energy and industrial rallying. Joy Global Inc jumped 2.3 percent to $56.44 while Halliburton Co was up 1.3 percent to $58.11.

Speeches from U.S. Federal Reserve officials during the day were parsed for clues to the pace of U.S. tightening and could drive fresh market moves.

New Fed Chair Janet Yellen surprised investors mid-week by hinting interest rates might rise earlier than expected, while U.S. economic data on Thursday was mixed.

"The prospect of rates rising sooner than what people had expected, that effect passed so quickly, it was just a day trade," said Dan Morris, global investment strategist at TIAA-CREF.

The dollar's three-day rally sputtered as the euro rose against the greenback after data showed a record euro zone current account surplus in January.

That kept the dollar near a three-week peak against a basket of major currencies. The dollar later fell 0.16 percent against the safe-haven Swiss franc and 0.16 percent against the yen.

The euro hit an intraday high of $1.38011, and was up 0.12 percent against the greenback.

German benchmark debt futures rose 11 ticks to settle at 142.51.

Benchmark 10-year notes traded rose 7/32 in price to yield 2.7480 percent.

Brent crude rose 47 cents to settle at $106.92 a barrel. U.S. crude for May delivery, which became the front-month contract on Friday, settled up 56 cents at $99.46 a barrel.

(Additional reporting by Simon Jessop, Reporting by Herbert Lash; Editing by Chris Reese, Leslie Adler and Chizu Nomiyama)

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