* Stocks steady after two days of sharp moves
* Yen's gains unravel after Putin tones down rhetoric
* Russian shares, rouble steady after early wobble
* Focus shifts to ECB on Thursday, U.S. jobs on Friday
* ADP figures softer than expected
By David Gaffen and Marc Jones
NEW YORK/LONDON, March 5 A semblance of calm
returned to world markets on Wednesday after two days of intense
volatility, with the United States and Russia set to hold talks
on easing East-West tension in Ukraine.
An index of global equity shares was
modestly higher, currency and bond markets stabilized and oil
prices dipped again as the West stepped up efforts to persuade
Moscow to pull its forces back in Crimea and avert the risk of a
war. Russian President Vladimir Putin said on Tuesday that
military force would only be used as a last resort.
"Things are indeed calming down in Ukraine," said Steen
Groendahl, head of global research at Nordea in Helsinki.
"Quite honestly, markets have taken this in their stride.
There was a knee-jerk reaction on Monday but since then it has
sort of been smooth sailing."
Wall Street was little changed, with the Standard & Poor's
500 Index slightly higher after closing at another record on
Tuesday. Softer-than-expected jobs data from ADP dampened
expectations for Friday's U.S. non-farm payrolls figures.
A separate reading on U.S. service sector activity was
weaker than expected, but still pointed to expansion in that
sector. Investors seemed to chalk up the weakness overall to the
U.S. crude fell to $102.04, down $1.29, after falling
$1.59 on Tuesday. The contract hit its highest level since Sept.
20 on Monday at $105.22.
The Dow Jones industrial average was down 36.86
points, or 0.22 percent, at 16,359.02. The Standard & Poor's 500
Index was down 0.77 points, or 0.04 percent, at 1,873.14.
The Nasdaq Composite Index was up 1.18 points, or 0.03
percent, at 4,353.15.
European shares, which surged more than 2 percent
on Tuesday to spur a global rebound, traded sideways as currency
and bond markets also stabilized.
Russian stocks and the rouble fought off early
weakness as investors decided Moscow was dialing down the
intensity of its rhetoric over Ukraine.
Putin said he did not want political tension to detract from
economic cooperation with Russia's "traditional partners."
The relative calm in Crimea allowed attention in Europe to
drift back toward Thursday's meeting of the European Central
The euro edged down to $1.3736, having dipped
overnight. Benchmark Bunds lost ground as the German bond
market's general safe-haven appeal waned.
ECB policymakers remain under pressure either to cut
interest rates again or use additional unconventional measures
to fend off the threat of ultra-low inflation turning into
something more damaging.
Analysts at Citi said in a note that their base-case
expectation was that the bank would cut rates by 15 basis points
to 0.10 percent. But many others think it will hold off for now.
Revised PMI data on Wednesday showed euro zone firms
registered their fastest growth rate in over 2-1/2 years last
month, though the gulf between growth in Germany and the decline
in France continued to temper the mood.
The tensions between Russia and the West have added to
pressure on emerging markets. Some are already struggling to
cope with investors shifting away because the U.S. Federal
Reserve is reducing its flow of cheap funding. Emerging market
equities have had 22 consecutive weeks of outflows, according to
Bank of America-Merrill Lynch data.
"The big question we are all thinking about is when to go
back into emerging markets," said Hans Peterson, global head of
asset allocation at SEB investment management. "It might take a
few more weeks before we see some stability in U.S. data, so we
are probably still a bit away from the entry point."
In Asia, Tokyo's Nikkei climbed 1.2 percent after
the S&P 500's record finish on Tuesday.
In the currency market, the calmer geopolitical view kept
the yen under pressure after a heavy reversal on Tuesday. The
dollar was last buying 102.30 yen, moving away from a
one-month low of 101.20 hit on Monday, while the euro bought
The Australian dollar gained to $0.8979 on revived risk
appetite and data showing the country's economic growth had
Australia's major trading partner, China, said on Wednesday
it would maintain its economic growth target for 2014 at around
7.5 percent, as expected, and push forward with convertibility
of the yuan.
Analysts said the statement was an indication that China
would widen the yuan's trading band, further signaling a
possible end to the currency's one-way appreciation
Spot gold, another safe-haven asset that rose on the
Russia-West tensions, gained $5.40 to $1,339.31 an ounce after
dropping 1.2 percent on Tuesday.