Wall Street rebounds but caution prevails on Ukraine
By Angela Moon
NEW YORK (Reuters) - U.S. stocks were slightly higher on Friday, recovering from their worst session since early February, but investors were reluctant to make big bets ahead of a referendum in Crimea this weekend.
The S&P 500 was below a key technical support level of 1,850 for the second day. Curbing investors' enthusiasm for equities, Russia's navy said fighter jets had started training exercises over the Mediterranean Sea, an announcement likely to raise tensions in the standoff with Ukraine.
Global equity markets were pressured, while gold and the yen strengthened as traders flocked into the safe-haven assets.
The CBOE Volatility index VIX , Wall Street's so-called fear gauge, rose 3.9 percent to 16.81. A key emerging market exchange-traded fund, the iShares MSCI Emerging Markets ETF (EEM.P: Quote), gained 0.9 percent to $38.54 after falling nearly 2 percent in the previous session.
Following the recent selloff in emerging markets, some market participants believe now is the time to get into emerging market equities, but analysts are wary.
"The numbers, certainly on the face of it, look compelling," said Jade Fu, investment manager at Heartwood Investment Management. The MSCI emerging markets index is trading at 1.5 times price-to-book value and poor sentiment has already resulted in outflows of over $30 billion from emerging market equities this year, Fu said.
But "it is difficult to hold a very optimistic view of emerging market assets at this time, even if lower valuations have made them appear more attractive."
After holding six hours of "direct and candid" talks with his Russian counterpart Sergei Lavrov in London, U.S. Secretary of State John Kerry said the U.S. and international community would not recognize the outcome of the referendum in Crimea on Sunday. Continued...