(Adds oil settlement prices)
* Global stocks rise on Putin's conciliatory tone
* Euro zone bond yields plumb record lows after euro zone
* Oil prices fall on signs of weak demand
By Herbert Lash
NEW YORK, Aug 14 Global equity markets edged
higher on Thursday after President Vladimir Putin of Russia
sounded a conciliatory note over the crisis in Ukraine, while
bond yields in Europe fell to record lows as the euro zone's
recovery stalled in the second quarter.
Putin told Russian ministers and members of parliament in
Crimea that Russia would stand up for itself but not at the cost
of confrontation with the outside world, easing off months of
tough rhetoric over Ukraine.
Stocks on Wall Street rose, following gains in Europe, where
equity markets have tumbled in past weeks on fears of an
escalation of tensions between the West and Moscow over Ukraine.
"The situation in Ukraine will only become a problem if it
gets much worse, and right now it doesn't seem like that's going
to be the case, which is helping the market hang in there," said
Brian Battle, director of trading at Performance Trust Capital
Partners in Chicago.
The pan-European FTSEurofirst 300 index rose 0.28
percent to close at 1,329.14, and MSCI's all-country world index
rose 0.3 percent.
On Wall Street, the Dow Jones industrial average rose
48.38 points, or 0.29 percent, to 16,700.18. The S&P 500
gained 6.79 points, or 0.35 percent, to 1,953.51 and the Nasdaq
Composite added 14.473 points, or 0.33 percent, to
Bond yields dropped to record lows across the euro zone, and
the euro hovered near its weakest in nine months after Germany
reported its economy shrank in the second quarter, fueling
expectations of more European Central Bank stimulus.
German 10-year bond yields briefly traded
below 1 percent for the first time, falling to 0.988 percent,
according to traders who contribute data to trading platforms.
Spanish and French bond yields also plumbed record lows.
Benchmark 10-year U.S. Treasuries rose 8/32 in
price, pushing the yield down to 2.3997 percent.
A surprise 0.2 percent contraction in economic output in
Germany, the euro zone's growth engine, and stagnation in France
halted the currency bloc's recovery. Analysts polled by Reuters
had expected the euro zone to eke out a 0.1 percent quarterly
Persistent fears about Russia's aid convoy to eastern
Ukraine, which Kiev and the West reckon could be a pretext for
an invasion, also helped intensify demand for lower-risk U.S.
and German government debt.
"These events are pushing German and global yields lower,"
said Andrew Mulligan, head of global strategy at Standard Life
Investments in London. "Some of the engines of growth in Europe,
especially Germany, are slowing. France and Italy are showing
The euro rose from nine-month lows against the dollar
, trading 0.01 percent stronger at $1.3366. The dollar
also traded just above break-even against the Japanese yen
U.S. crude prices fell more than $2 a barrel and retreated
more than 50 cents in a minute at one point as shares of the
exchange-traded U.S. Oil Fund saw high-volume trading.
U.S. crude for September delivery settled down $2.01
cents at $95.58 a barrel.
Brent crude for delivery in September fell $2.27 to
settle at $102.01.
(Additional reporting by Sujata Rao in London, Reporting by
Herbert Lash; Editing by Dan Grebler and Chizu Nomiyama)