* Stocks stabilize after two days of sharp moves
* Yen fades further after Putin dials down rhetoric
* Focus shifts to ECB on Thursday, U.S. jobs on Friday
* U.S. bonds steady after softer-than-expected data
By David Gaffen and Richard Leong
NEW YORK, March 5 World markets were calm on
Wednesday after two days of wild swings, with the United States
and Russia set to hold talks on easing East-West tension in
An index of global equity markets clung to
modest gains, 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
war. Russian President Vladimir Putin said on Tuesday that
military force would be used only as a last resort.
Investors, while awaiting developments between Russia and
the West, turned their focus to what the European Central Bank
might to do on Thursday to support the region's fragile economy
and the U.S. government's latest job snapshot on Friday.
"The market is generally sideways until Friday's jobs
report," said David Molnar, managing director at HighTower San
Wall Street shares were little changed, with the Standard &
Poor's 500 index hovering near its record high close set
Softer-than-expected jobs data from U.S. payroll processor
ADP nicked optimism over Friday's U.S. non-farm payrolls
figures, while a separate private gauge of U.S. service sector
activity fell to its weakest level in four years in February,
though it still pointed to expansion in that sector. Investors
seemed to chalk up the weakness overall to the weather.
In early afternoon trading, the Dow Jones industrial average
was down 30.99 points, or 0.19 percent, at 16,364.89. The
Standard & Poor's 500 Index was up 1.06 points, or 0.06
percent, at 1,874.97. The Nasdaq Composite Index was up
8.27 points, or 0.19 percent, at 4,360.25.
A measure of European shares, which surged more
than 2 percent on Tuesday to spur a global rebound, ended down
0.06 percent at 1,343.99.
In Asia, Tokyo's Nikkei climbed 1.2 percent.
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 calmer geopolitical view kept the yen under pressure
after a heavy reversal on Tuesday. The dollar was last buying
102.37 yen, moving away from a one-month low of 101.20
hit on Monday.
The relative calm in Crimea, where Russian intervened this
past weekend, allowed attention in Europe to drift back toward
Thursday's meeting of European central bankers.
The euro edged down 0.1 percent to $1.3731 overnight
and held firm versus the yen at 140.53 yen. The German
bond market's general safe-haven appeal waned, sending 10-year
Bund yields up to 1.61 percent.
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.
EMERGING MARKETS UNDER PRESSURE
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."
The MSCI index on emerging market equities was up
0.46 percent at 960.55, although it was still 4.6 percent lower
so far in 2014.
In the energy market, Brent crude futures fell
$1.06, or .97 percent at $108.24 a barrel. U.S. oil futures
lost $1.41 or $1.36 percent at $101.92.
Spot gold, another safe-haven asset that rose on the
Russia-West tensions, gained 0.1 percent to $1,339.99 an ounce
after dropping 1.2 percent on Tuesday.