* S&P 500 closes at record high
* Russian ruble hits 5-year low vs dollar
* Euro bounces off 2-week low
* U.S. Treasuries' yields at two-week low
By Chuck Mikolajczak
NEW YORK (Frankfurt: HX6.F - news) , Feb 27 (Reuters) - Stocks on world markets mostlyadvanced on Thursday, while the S&P 500 closed at a record high,as comments from U.S. Federal Reserve Chair Janet Yellen offsetconcerns over tension in Ukraine and Russia.
Yellen signaled the central bank was likely to stay thecourse in its current plan to scale back its stimulus measuresand said unusually harsh winter weather appears to be behindrecent signs of weakness in the U.S. economy.
"Yellen came in and did exactly what she was supposed to do,and said, 'Listen, the weather is still a variable.' But shemade it clear the Fed is ready to stand up and do what'snecessary to continue to support the economy, and that's exactlywhat Wall Street wanted to hear," said Adam Sarhan, chiefexecutive officer of Sarhan Capital in New York.
But gains were held in check as a result of tensions inUkraine, as armed men seized the parliament in Ukraine's Crimearegion and raised the Russian flag, alarming Kiev's new rulers,who urged Moscow not to abuse its navy base rights on thepeninsula by moving troops around.
The White House warned Russia to respect Ukraine'ssovereignty and territorial integrity and told Moscow to avoid"provocative" actions with regard to the crisis-hit country.
The Russian ruble touched a five-year low against the dollar, while Ukraine's hryvnia fell to a record lowafter its central bank abandoned its managed exchange ratepolicy.
The geopolitical uncertainty caused investors to seek thesafety of U.S. Treasuries, driving yields totwo-week lows. The yield on the 10-year note was 2.646 percent.
The Japanese yen and Swiss franc, bothtraditional safe-haven plays in foreign exchange, gained.
"There are definitely fears about geopolitics; the generalmood toward emerging markets is not great. The concern is thiscould develop into a proper civil war in Ukraine that splits thecountry," said Manik Narain, strategist at UBS (Xetra: UB0BL6 - news) in London.
On Wall Street the S&P 500 advanced to close at a recordhigh of 1,854.31, breaking its prior high set Jan. 15, afterYellen's comments and an unexpected rise in durable goodsorders, excluding transportation. The index had been unable tohold above the record despite several attempts this week.
If the view holds that harsh winter weather is to blame fora recent slowing in economic growth, investors are likely toexpect the Fed to keep trimming its bond-buying program by $10billion at each policy meeting, leaving it on track to end thepurchases completely by the end of the year.
The Dow Jones industrial average rose 74.3 points or0.46 percent, to 16,272.71, the S&P 500 gained 9.15points or 0.5 percent, to 1,854.31 and the Nasdaq Composite added 26.869 points or 0.63 percent, to 4,318.933.
The MSCI world equity index, which tracksshares in 45 nations, gained 1.30 points, or 0.32 percent, to408.67.
Yellen's testimony curbed declines in Europe, with theFTSEurofirst 300 index, closing down 0.2 percent afteran earlier fall of 1 percent, and the euro gained 0.2percent to $1.371 after it dropped to a two-week low of $1.3641.
Aside from tensions in Ukraine, declines in Europe werestemmed by a downward revision to Spain's fourth-quarter grossdomestic product and ECB data that showed little improvement inthe amount of credit reaching euro-zone firms.
German inflation figures suggested there would be scantpick-up in euro-zone inflation, due on Friday.
The ECB meets next week and is under pressure to cutinterest rates again and dip back into its unconventional policycupboard to ensure the euro zone does not become mired indeflation.
In bond markets, the possibility that more moves are comingfrom the ECB and a strong debt auction in Italy helpedlower-rated Italian and Spanish debt keep pace with safe-havenGerman Bunds.
Copper touched a three-month low below $7,000 atonne, extending its losses over the past week on recentconcerns about slower growth in China, before rebounding to$7,025 a tonne.
Gold prices were flat as spot gold edged down 1 centto $1,330.69 an ounce, well off a high of $1,345.35 hit earlierin the session, while U.S. COMEX gold futures for Aprildelivery settled up $3.80 at $1,331.80 an ounce.
Brent crude fell 56 cents to settle at $108.96 abarrel and U.S. oil settled 19 cents lower to $102.40 abarrel as the civil unrest in Ukraine curbed overall riskappetite and fueled fears that it would slow growth in Europeand lessen oil demand.
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