* Putin says Russia does not want further Ukraine split
* U.S. Federal Reserve to give statement Wednesday
* 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 after comments from Russian President Vladimir
Putin soothed anxiety that tensions over Ukraine could escalate,
while U.S. Treasuries yields edged lower ahead of the Federal
Reserve's policy decision.
Putin on Tuesday signed 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.
Wall Street climbed for a second straight session following
Putin's comments, with the S&P 500 within striking distance of
Gains were broad, with nine of the 10 primary S&P 500 sector
indexes higher for the day. An S&P technology sector index
, up 1.4 percent, led the advance, buoyed by a rally in
Microsoft shares jumped 3.9 percent to $39.55, the biggest
daily advance for the software company's stock since November.
Tuesday's move took the stock near $40 for the first time since
Late Monday, a source familiar with the matter told Reuters
the company may unveil an iPad version of the company's Office
software suite on March 27.
The two-day advance of 1.7 percent marked the S&P 500's best
back-to-back performance since early February. However, not all
market participants were convinced that the relief over Ukraine
would keep lifting equities.
"This is the triumph of hope over experience," said Brad
McMillan, chief investment officer of Commonwealth Financial in
Waltham, Massachusetts. "I would say investors should be very
cautious. This doesn't seem to be a market that is trading on
longer-term expectations or possibilities."
The Dow Jones industrial average rose 88.97 points or
0.55 percent, to 16,336.19, the S&P 500 gained 13.42
points or 0.72 percent, to 1,872.25 and the Nasdaq Composite
added 53.364 points or 1.25 percent, to 4,333.313.
The MSCI All-World Index of global equities
rose 0.7 percent.
The pan-European FTSEurofirst 300 index closed 0.7
percent higher at 1,306.11 points, recovering from an earlier
session low of 1,290.28. It fell more than 5 percent in about
one week from a near 5-1/2-year high earlier this month and is
still down 1 percent this year after surging 16 percent in 2013.
In late New York trade, the euro held a small gain of 0.06
percent against the U.S. dollar at $1.3930, having
briefly broken down to $1.3881.
The dollar fell to 101.41 yen, a loss of 0.34 percent
against the Japanese currency.
FED COULD ADJUST POLICY THRESHOLD
The Fed is expected to continue to reduce the size of its
monthly bond purchase program, but also alter its forward
guidance when it gives its statement on Wednesday at the close
of a two-day policy meeting. The meeting will be the first
presided over by Fed Chair Janet Yellen.
"The message (Yellen) wants to convey is probably, 'We're
still accommodative but we're still tapering, and we're
flexible,' which is a very complicated message," said Kathy
Jones, fixed income strategist at Charles Schwab in New York.
Traders said uncertainty over the outcome of the Fed meeting
spurred some safe-haven demand for Treasuries.
The 10-year U.S. Treasury note was last up 7/32
in price to yield 2.67 percent, down slightly in yield from late
Monday, when the yield was at 2.70 percent.
The 30-year U.S. Treasury bond was last up 5/32
in price to yield 3.62 percent, down slightly in yield from late
Monday, when the yield was at 3.63 percent.
The Fed previously said that it would not raise interest
rates until joblessness fell to at least 6.5 percent, a pledge
that policymakers thought would hold until at least mid-2015.
But that rate hit a five-year low of 6.6 percent in January,
before rising to 6.7 percent in February.
The Chinese yuan deepened its month of losses against the
greenback on more signs of problems with a slowing economy and a
heavily indebted corporate sector. The yuan's weakness was seen
as a benefit for the yen, helping lift it against the greenback.
The yuan weakened to 6.1755 to the dollar versus Monday's
close around 6.1580.
U.S. crude oil futures rose by more than $1 per barrel to
the highest price in a week following strong gains in equities,
which outweighed forecasts for another build in domestic
U.S. crude settled $1.62 higher at $99.70 per barrel.
Prices had mostly fallen in recent weeks since touching a
five-month high of $105.22 on March 3 when worries of war in
Ukraine peaked, and settled 81 cents lower on Monday.