GLOBAL MARKETS-Stocks flat after Putin comments, gold falls

Wed May 7, 2014 11:11am EDT

* Putin comments on Ukraine may ease geopolitical tensions

* Gold prices decline, U.S. dollar index edges up

* Yellen says U.S. economy needs support, cites geopolitical tension (Updates to open of U.S. trading; changes dateline; previous LONDON)

By Ryan Vlastelica

NEW YORK, May 7 (Reuters) - Stock markets around the world were flat on Wednesday as investors digested comments from Russian President Vladimir Putin that indicated a possible easing to the geopolitical concerns over Ukraine that have recently weighed on markets.

Putin said he was ready to discuss a way out of the Ukrainian crisis and called on separatists in east Ukraine to postpone a May 11 referendum on the status of the mostly Russian-speaking region. He spoke after talks with the head of the Organization for Security and Cooperation in Europe, who said the security and rights body would soon propose a "road map" to defuse the crisis.

Gold, viewed as a safe-haven asset, fell 0.8 percent, while the U.S. dollar rose slightly against a basket of currencies, though it remained near a six-month low.

"We need confidence that the Russia situation remains isolated; getting that would do a lot to stabilize the market. Of course, anything that suggests more escalation is on the way would be a real negative for the market," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia.

Market participants also paid close attention to testimony from Federal Reserve Chair Janet Yellen, who said the U.S. economy was still in need of support from the central bank given the "considerable slack" in the labor market. She also cited the housing sector and geopolitical tensions as issues of concern.

That the U.S. economy needs more accommodation "may mean the economy isn't recovering as much as we were expecting," said Green, who helps oversee about $7.5 billion in assets.

The Dow Jones industrial average was up 22.74 points, or 0.14 percent, at 16,423.76. The Standard & Poor's 500 Index was down 1.37 points, or 0.07 percent, at 1,866.35. The Nasdaq Composite Index was down 48.95 points, or 1.20 percent, at 4,031.81.

The Nasdaq was pressured by a sharp decline in shares of Whole Foods Market Inc, which plummeted more than 20 percent to $38.06 following disappointing results. Yahoo Inc was also sharply lower, down 5.6 percent at $34.47.

The benchmark 10-year U.S. Treasury note was unchanged in price to yield 2.595 percent. The U.S. dollar index rose 0.07 percent against a basket of currencies. Both the yen and euro were flat against the dollar.

European shares were flat after trading lower earlier in the session. The MSCI International ACWI Price Index fell 0.3 percent.

Oil prices rose, underpinned by tensions in Ukraine, though Brent's premium over U.S. prices narrowed after an industry report showed a sharp draw in inventories in the world's largest oil consumer.

U.S. crude futures rose 1.3 percent to $100.79 while Brent crude was up 0.4 percent. (Editing by Dan Grebler)