By PAN PYLAS
AP Business Writer
LONDON (AP) - Following two days of big swings, financial markets settled down Wednesday amid further signs of an easing in tensions between Russia and Ukraine.
Though the day ahead is full of potential diplomatic pitfalls, investors think the big risk - of a war between the two countries - has been averted for now at least.
"In terms of the international stage, this does seem to have moved on from looking like a game of poker to one of chess," said Joao Monteiro, analyst at Valutrades.
In Europe, the FTSE 100 index of leading British shares closed down 0.7 percent at 6,775.42 while Germany's DAX fell 0.5 percent to 9,542.02. The CAC-40 in France ended 0.1 percent lower at 4,391.25.
In the U.S., the Dow Jones industrial average was down 0.2 percent at 16,361 while the broader S&P 500 index was flat at 1,874.
Wednesday's moves are modest compared with what went on earlier in the week. On Monday, investors, particularly in Moscow, were worried that the crisis in Ukraine was escalating out of control following Russia's effective takeover of the Crimean Peninsula.
On Tuesday, as those fears eased following the end of a Russian military drill and comments from Russia President Vladimir Putin, markets bounced back.
Though investors will continue to monitor developments in Ukraine, their main interest over the coming days will center on a slew of economic news that culminates with Friday's U.S. nonfarm payrolls report for February.
Wednesday's weak US figures had little impact on trading and on expectations for the payrolls report. Private payrolls firm ADP said 139,000 jobs were created in February, around 16,000 shy of predictions, while the nonmanufacturing index from the Institute for Supply Management - a gauge of activity in the services sector - fell to a four-year low of 51.6 from 54.0.
Many in the markets appear to be putting much of the recent soft U.S. data run to the bad weather that has afflicted large parts of the country.
"As the market is currently prepared to do, we have to rely on the premise that the spring season will mark economic rebound," said Andrew Wilkinson, chief market analyst at Interactive Brokers.
The other potentially big economic driver this week will be Thursday's monthly policy meeting of the European Central Bank. Following some upbeat economic data for the 18-country eurozone, few economists think the bank will ease policy further.
The mood was flat across other financial markets as well. Among currencies, the euro was down 0.1 percent at $1.3734 while a barrel of benchmark New York crude oil fell 1.2 percent to $102.12. At the start of the week, the price of assets like oil and gold ratcheted sharply higher on the back of the increase in tensions in Ukraine.
Earlier in Asia, markets enjoyed a relatively strong session as investors caught up with the previous day's developments. Japan's Nikkei 225 advanced 1.2 percent to close at 14,897.63 while South Korea's Kospi rose 0.9 percent to 1,971.24. Hong Kong's Hang Seng was an exception and slipped 0.3 percent to 22,579.78.
Regional traders are also focusing on the National People's Congress in China. The country's leaders pledged Wednesday to promote sustainable growth by opening state-dominated industries to private investment and making banks more market-oriented while keeping this year's economic expansion at a relatively robust 7.5 percent.