* Putin comments on Ukraine may ease geopolitical tensions
* Gold prices decline, U.S. dollar index edges up
* Yellen says U.S. economy needs support, cites geopolitical tension (Updates to afternoon U.S. trading)
By Ryan Vlastelica
NEW YORK, May 7 Stock markets around the world were mostly flat on Wednesday as investors digested comments from Russian President Vladimir Putin that indicated a possible easing to geopolitical concerns over Ukraine that have recently weighed on investors.
Gold, viewed as a safe-haven asset, fell 0.8 percent, while the U.S. dollar rose slightly against a basket of currencies, though it remained near a six-month low.
Market participants also paid close attention to testimony from Federal Reserve Chair Janet Yellen, who said the U.S. economy was still in need of support from the central bank given the "considerable slack" in the labor market. She also cited the housing sector and geopolitical tensions as issues of concern.
That the Fed sees a need for more accommodation "may mean the economy isn't recovering as much as we were expecting," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia.
Putin said he was ready to discuss a way out of the Ukrainian crisis and called on separatists in east Ukraine to postpone a May 11 referendum on the status of the mostly Russian-speaking region.
"We need confidence that the Russia situation remains isolated; getting that would do a lot to stabilize the market. Of course, anything that suggests more escalation is on the way would be a real negative," said Green, who helps oversee about $7.5 billion in assets.
The Dow Jones industrial average was up 81.98 points, or 0.50 percent, at 16,483.00. The Standard & Poor's 500 Index was up 2.34 points, or 0.13 percent, at 1,870.06. The Nasdaq Composite Index was down 46.77 points, or 1.15 percent, at 4,033.99.
The Nasdaq was pressured by Whole Foods Market Inc, which plummeted more than 20 percent to $38.06 on disappointing results, and by Yahoo Inc, which lost 5.6 percent at $34.47. The Dow gained on strength in UnitedHealth Group , which added 1.9 percent following positive results from peer company Humana Inc.
The benchmark 10-year U.S. Treasury note was up 4/32, the yield at 2.5788 percent. The U.S. dollar index rose 0.08 percent against a basket of currencies. Both the yen and euro were flat against the dollar.
European shares rose 0.1 percent after trading lower earlier in the session. The MSCI International ACWI Price Index fell 0.18 percent.
Oil prices rose, underpinned by tensions in Ukraine, though Brent's premium over U.S. prices narrowed after an industry report showed a sharp draw in inventories in the world's largest oil consumer. U.S. crude futures rose 1.0 percent to $100.50 while Brent crude was up 0.6 percent. (Editing by Dan Grebler)