* S&P 500 touches record high on drop in U.S. jobless claims
* Euro hits year high after ECB signals no stimulus
* Investors shift focus to U.S. payrolls data due Friday
* Oil in late bounce, gold rises, bonds fall
By Richard Leong
NEW YORK, March 6 World share markets rose on
Thursday, supported by hopes that diplomatic efforts would cool
the crisis in Ukraine, while the euro advanced to its highest
level of the year after the European Central Bank signaled the
euro zone needs no additional stimulus.
The latest developments in Ukraine, while still worrisome,
have not caused investors to back away from stocks and risky
investments on a global scale, as occurred on Monday.
"We had a bit of selloff in midday session and late
afternoon but the fact the S&P 500 managed to set another record
shows how much resistance this market has to geopolitical
overhang that is clearly not over, resistance to bad news" said
Tim Ghriskey, chief investment officer of Solaris Asset
Management in Bedford Hills, New York.
MSCI's world equity index, which tracks
shares in 45 countries, was up 0.5 percent, and the MSCI
emerging market index rose 1.1 percent. Standard &
Poor's 500 index hit a record high, propelled partly by a
bigger-than-expected drop in U.S. weekly jobless claims.
Crimea's parliament voted to join Russia and its
Moscow-backed government set a referendum in 10 days on the
decision in a dramatic escalation of the crisis in the Ukrainian
Black Sea peninsula.
U.S. President Barack Obama took steps to punish those
involved in threatening Ukraine while European Union leaders
agreed to suspend visa and investment talks with Russia.
These events reminded investors that the dispute is far from
being resolved, but the risk of war has faded.
"Right now, the biggest threat has diminished," said Kathy
Jones, fixed income strategist at Charles Schwab in New York.
European central bankers offset the geopolitical worries
when, as expected, they left interest rates unchanged but
offered no signal the ECB will implement unconventional measures
such as bond purchases to avert the threat of excessively low
inflation and underpin a fragile recovery.
The Bank of England, also meeting on Thursday, kept interest
rates unchanged, seeking to give the economy more time to build
momentum before removing stimulus.
The ECB's show of restraint on monetary stimulus bolstered
the euro, boosting it to $1.3871, the highest since late
December, according to Reuters data. It was at $1.3856 in late
U.S. trading, up 0.9 percent from Wednesday.
The common currency bought 142.76 yen, up 1.6
percent from late on Wednesday but still below the high of
145.09 set on Jan. 1.
European stocks were also supported by the ECB's decision.
The FTSEurofirst 300 index tracking Europe's top shares
ended little changed at 1,344.56.
"European stocks have been quite resilient in the face of
the multiple shocks, from the Fed's tapering to the Ukrainian
crisis, even though risks seem limited," said Francois
Chevallier, a strategist at Banque Leonardo in Paris.
On Wall Street, the Dow Jones industrial average rose
61.71 points or 0.38 percent, to 16,421.89, the S&P 500
gained 3.22 points or 0.17 percent, to 1,877.03 and the Nasdaq
Composite dropped 5.848 points or 0.13 percent, to
The S&P 500 reached an intraday record high of 1,881.94.
Earlier, Tokyo's Nikkei closed up 1.6 percent.
Russian shares were a notable exception, falling nearly 1
percent, while the rouble weakened 0.3 percent against
the U.S. dollar at 36.138 roubles.
Due to the resilience in stock prices, investors further
pared their holdings in less-risky U.S. and German government
bonds. The yield on U.S. 10-year Treasuries rose 4
basis points to 2.73 percent, while the yield on 10-year Bunds
gained 5 basis points to 1.65 percent.
In the oil market, crude prices rose in a late bout of
technical buying from earlier losses tied to reduced fears of
war in Ukraine. Brent crude settled up 34 cents, or 0.32
percent, at $108.10 a barrel. U.S. crude settled up 11
cents, or 0.11 percent, at $101.56.
Gold traded in a tight range with investors awaiting cues
from Friday's U.S. jobs data and developments in Ukraine. It
rose $13.2, or 0.99 percent, to $1,350.21 an ounce.
As markets calmed after gyrating on Russia-West tension this
week over the Ukraine crisis, investors have shifted their focus
to the U.S. payrolls data due 8:30 a.m. (1330 GMT) on Friday,
which might show anemic hiring due to harsh winter weather
across much of the country.
Economists polled by Reuters forecast U.S. employers likely
hired 149,000 workers in February, compared with 113,000 in
January, while the unemployment rate likely held at a five-year
low of 6.6 percent.
The U.S. Labor Department offered an encouraging sign on the
jobs market. It said on Thursday that first-time filings for
unemployment benefits fell to a three-month low last week.