* Russian ruble hits 5-year low vs dollar
* Euro hits 2-week low; soft data add to uncertainty
* U.S. Treasuries yields at two-week low
* Yuan rebounds but still below PBOC fixing
By Chuck Mikolajczak
NEW YORK, Feb 27 Stocks on world markets edged
lower on Thursday, as tension in Ukraine and Russia curbed risk
appetite, though Wall Street managed to hold near unchanged as
investors tuned in to Fed chair Janet Yellen's testimony in
Saber-rattling in the Ukraine grew, as armed men seized the
parliament in Ukraine's Crimea region and raised the Russian
flag, alarming Kiev's new rulers, who urged Moscow not to abuse
its navy base rights on the peninsula by moving troops around.
The Russian ruble touched a five-year low against the dollar
, while Ukraine's hryvnia fell to a record low
after its central bank abandoned its managed exchange rate
The geopolitical uncertainty caused investors to seek the
safety of U.S. Treasuries, driving yields to
two-week lows. The 10-year note was yielding 2.649 percent. The
Japanese yen and Swiss franc, both traditional
safe-haven plays in foreign exchange, gained.
"There are definitely fears about geopolitics; the general
mood towards emerging markets is not great. The concern is this
could develop into a proper civil war in Ukraine that splits the
country," Manik Narain, strategist at UBS in London, said.
Wall Street was little changed, as comments from Yellen
failed to provide much clarity on the impact of the weather on
recent economic weakness. Data on Thursday showed orders for
long-lasting U.S. manufactured goods excluding transportation
unexpectedly rose last month, as did a gauge of business
"Durables came in better than feared, but it is difficult to
tell what the weather impact was and what the impact of an
actual slowdown might be," said Joseph Tanious, global market
strategist at J.P. Morgan Asset Management in New York.
Yellen, during her testimony before the Senate, said recent
data pointed to a softening in spending in the U.S. economy that
might be explained partly by the bad weather.
If the view holds that harsh winter weather is to blame,
investors are likely to expect the Fed to keep trimming its
bond-buying program by $10 billion at each policy meeting,
leaving it on track to end the bond purchases completely by the
end of the year.
The Dow Jones industrial average rose 0.22 point, or
0 percent, to 16,198.63, the S&P 500 gained 0.49 point,
or 0.03 percent, to 1,845.65 and the Nasdaq Composite
added 4.856 points, or 0.11 percent, to 4,296.92.
Shares of both J.C. Penney Co Inc and Best Buy Co
Inc jumped after the companies posted strong results.
Penney forecast more improvement in its comparable sales and
gross profit margin this fiscal year, and Best Buy posted
adjusted earnings that topped forecasts.
Penney surged 21 percent to $7.23 while Best Buy advanced
5.4 percent to $27.22. The S&P retail index <.SPXRT dipped 0.1
percent following a five-day rally
The MSCI world equity index, which tracks
shares in 45 nations, slipped 0.20 point, or 0.05 percent, to
The sharpening rhetoric in Ukraine held down Europe's main
markets, which lost 0.4 percent. In Germany the DAX
fell 1 percent for the biggest drop since Feb. 3, while
the euro dropped to a two-week low of $1.3641.
There was plenty of additional pressure for the euro.
Spain's fourth-quarter gross domestic product figures were
revised downward, and ECB data showed little improvement in the
amount of credit reaching euro-zone firms.
German inflation figures suggested there would be scant
pick-up in euro-zone inflation, which is to be published on
The ECB meets next week and is under pressure to cut
interest rates again and dip back into its unconventional policy
cupboard to ensure the euro zone doesn't become mired in
In bond markets, the possibility that more moves are coming
from the ECB and a strong debt auction in Italy helped
lower-rated Italian and Spanish debt keep pace with safe-haven
Among commodities, copper dropped to a three-month
low below $7,000 a tonne, extending its losses over the past
week on recent concerns about slower growth in China.
Gold prices edged up due to a steady dollar, but remained
well below the previous day's four-month high as buyers of
coins, bars and jewelry in Asian markets held off in expectation
of a further price drop. Spot gold advanced 0.2 percent
$1,333.50 an ounce, off Wednesday's high of $1,345.35.
After recent falls, the yuan saw a second day of
relative calm, standing at 6.1279 per dollar, just off
Wednesday's low of 6.1351. A bounce in Chinese shares helped
Asian shares gained 0.3 percent.
Dealers suspect the People's Bank of China has engineered
the recent decline in the country's currency to inject more
two-way volatility into the market and wrong-foot speculators
who had bet on its continued rise.