* Putin says Russia does not want further Ukraine split
* Start of two-day Fed meeting keeps volumes light
* Microsoft shares rally 4 pct, lead S&P 500
* Yuan falls against the dollar on problems in China
By Angela Moon
NEW YORK, March 18 Major world equity markets
rose on Tuesday while the safe-haven yen pared gains after
President Vladimir Putin, while approving plans to make Crimea
part of Russia, said he did not want to split Ukraine.
The remarks eased concerns that tensions over Ukraine might
escalate, driving down assets typically sought in times of
tension. The price of gold fell and yields on low-risk
government bonds, which move inversely to the price of bonds,
Wall Street rose for a second straight day, with the
benchmark S&P 500 moving within 1 percent of its record high.
Gains were broad, with all 10 primary S&P 500 sectors
higher. Prices were also boosted after the latest economic data
showed consumer prices rose 0.1 percent in February, as
expected, while housing starts rose modestly from the previous
Shares of Microsoft Corp surged 4.1 percent to
$39.61, making the stock the S&P 500's biggest percentage
advancer. It was the biggest daily advance for the software
giant since November, and the move took the stock near $40 a
share for the first time since July 2000.
Late Monday, a source familiar with the matter told Reuters
that Microsoft may unveil an iPad version of the company's
Office software suite on March 27.
The MSCI All-World Index of global equities
rose 0.7 percent.
Trading volumes are expected to be low as investors await
the U.S. Federal Reserve's policy decision on Wednesday at the
close of the central bank's two-day meeting.
Putin signed an order approving a draft treaty on "adopting
the Republic of Crimea into the Russian Federation." In a speech
to a joint session of parliament, he defended the weekend
referendum in Ukraine's Crimea region in which voters
overwhelmingly said they wanted to join Russia.
After Sunday's vote, the United States and the European
Union imposed sanctions on a small group of Russian and Crimean
officials. However, the worst fears of financial markets that
the referendum would lead to violence were not realized.
"What had been going on in the Ukraine has been weighing on
the minds of investors for a while, so it is a relief that we
are apparently moving beyond this," said Joseph Tanious, global
market strategist at J.P. Morgan Asset Management in New York.
Russia's stock market, hammered in the run-up to the
vote, rose 1.9 percent, though the rouble edged down to
36.32 to the dollar.
The FTSEurofirst 300 of top European shares gained
1 percent, reversing earlier losses after Putin's comments.
Japan's Nikkei stock average ended up 0.9 percent,
recovering from Monday's six-week closing low.
The yen gained 0.2 percent against the dollar, to
101.57 yen, well below peaks around 101.20 hit last week. The
euro was steady at $1.3905, not far from a
two-and-a-half-year high around $1.3967 touched on Thursday.
FED COULD ADJUST POLICY THRESHOLD
The Fed meeting, the first presided over by Chair Janet
Yellen, is not likely to surprise. It is widely expected that
the U.S. central bank will continue to reduce its monthly
bond-buying stimulus, bringing it down this time to $55 billion,
as it removes the extraordinary monetary policy that has kept
interest rates low for years.
"The Fed has to acknowledge that the transitory factors are
more entrenched since inflation has run below their target for
about two years," said Michael Hanson, a senior economist at
Bank of America Merrill Lynch in New York.
Policymakers could adopt less specific language to describe
conditions under which it might tighten policy, instead of the
bank's current 6.5 percent unemployment rate threshold. The
jobless rate stands at 6.7 percent and has been falling rapidly,
though Fed officials are still signaling that interest rates
need to stay low to support the economy.
China's yuan fell against the dollar on China's
problems with a slowing economy and heavily indebted corporate
sector. Spot yuan traded at 6.1920 to the dollar, compared with
6.1781 at Monday's close.
German 10-year government bond yields, the
euro zone benchmark, edged up to 1.577 percent. Yields on U.S.
10-year Treasuries, which rose on Monday after the
U.S. data, were steady at 2.697 percent.
Spot gold traded at $1,355.33, after hitting a
six-month high of $1,391.76 on Monday before profit-taking
Brent crude oil rose to $106.25 a barrel on the reduced
Ukraine tensions as bargain hunters stepped in after prices fell
more than $2 on Monday.