* European stocks buoyed on economic outlook; Wall St dips
* Oil prices rise on fear of supply disruption over Crimea
* U.S. bond prices rise as Fed rate hike in weighs
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, March 21 World markets steadied on
Friday after a volatile week driven by speculation over shifts
in U.S. monetary policy, with equities holding near break-even,
the euro up slightly against the dollar and crude oil rising on
fear of supply disruptions over Crimea.
Stocks on Wall Street closed lower as investors exercised
caution heading into the weekend after the benchmark S&P 500
index earlier hit a record intra-day high. Equities initially
were boosted by Moscow's assertion that no other Ukrainian
region would be subject to intervention.
But Brent crude rose to just below $107 a barrel as U.S.
sanctions against Russia, the world's second-largest oil
exporter, kept fears of a supply disruption alive.
President Vladimir Putin signed laws completing Russia's
annexation of Crimea on Friday, and Brent posted a fourth weekly
Despite Friday's dip, the Dow and S&P 500 posted their best
weekly performance since mid-February, though some analysts said
equities are vulnerable to U.S.-Russian tensions.
The Dow Jones industrial average fell 28.35 points,
or 0.17 percent, to 16,302.7. The S&P 500 lost 5.61
points, or 0.3 percent, to 1,866.4, and the Nasdaq Composite
dropped 42.498 points, or 0.98 percent, to 4,276.788.
The Dow rose 1.5 percent for the week, the S&P gained 1.4
percent and Nasdaq added 0.7 percent.
"I don't know that if there's enough momentum behind the
market given the macro forces" to forecast further gains in the
near-term, said Dan Morris, global investment strategist at
TIAA-CREF. "We're expecting something more flattish for the next
quarter or so."
Companies tied to the pace of economic growth were among the
biggest gainers, with energy and industrial
rallying. Joy Global Inc jumped 2.5 percent to $56.51
while Halliburton Co was up 1.2 percent to $58.06.
European shares logged their biggest weekly gain in a month,
supported by a rally in basic resources stocks and some positive
technical buying signals.
The European basic resources index rose 1.1 percent
after the Chinese premier said on Thursday investment and
construction plans will accelerate to ensure domestic demand
expands at a stable rate, a sign China will support its economy.
MSCI's all-country world equity index traded
at break-even, paring earlier gains from European markets. The
euro zone's blue-chip Euro STOXX 50 index rose 0.25
percent after a major options expiry, and the pan-regional
FTSEurofirst 300 closed up 0.1 percent at 1,307.24.
"The elements for the continuation of the current rally are
on the table. The market is not cheap but not extremely
expensive either and economic growth is going to be decent,"
said Philippe Gijsels, head of research at BNP Paribas Fortis
"If you believe in the scenario of a gradual economic
upturn, you should play the sectors that benefit from that and
invest in stocks such as basic resources and banks," he said.
A Reuters poll on Thursday forecast European stocks will
extend their rally in 2014, fueled by a long-awaited rebound in
corporate profits as the region's economy picks up and global
investors shift from emerging markets to Europe.
New Fed Chair Janet Yellen surprised investors mid-week by
hinting interest rates might rise earlier than expected, while
U.S. economic data on Thursday was mixed.
Yellen was likely just repeating the views of private
analysts and investors when she said the central bank could
raise interest rates six months after ending a bond-buying
program, St. Louis Fed President James Bullard said on Friday.
"On the 'considerable period' being six months, the surveys
that I had seen from the private sector had that kind of number
penciled in," Bullard said during a lunch with journalists.
The dollar's three-day rally sputtered as the euro rose
against the greenback after data showed a record euro zone
current account surplus in January.
The dollar fell 0.12 percent against a basket of
major currencies. The dollar later fell 0.17 percent against the
safe-haven Swiss franc and 0.22 percent against the yen
The euro hit an intraday high of $1.38011, and was up
0.12 percent against the greenback.
German benchmark debt futures rose 11 ticks to
settle at 142.51.
Longer-dated U.S. Treasuries prices rose as investors
evaluated the possibility the Fed will increase benchmark rates
sooner than had been expected.
Benchmark 10-year notes rose 8/32 in price to
yield 2.7444 percent.
Brent crude rose 47 cents to settle at $106.92 a
barrel. U.S. crude for May delivery, which became the
front-month contract on Friday, settled up 56 cents at $99.46 a
(Additional reporting by Simon Jessop, Reporting by Herbert
Lash; Editing by Chris Reese, Chizu Nomiyama and Leslie Adler)