GLOBAL MARKETS-Reduced jitters over Ukraine stabilize markets

* Stocks stabilize after two days of sharp moves

* Yen fades further after Putin dials down rhetoric

* Focus shifts to ECB on Thursday, U.S. jobs on Friday

* U.S. bonds steady after softer-than-expected data

By David Gaffen and Richard Leong

NEW YORK (Frankfurt: HX6.F - news) , March 5 (Reuters) - World markets (Xetra: 4WM.DE - news) were calm on Wednesday after two days of wild swings, with the United States and Russia set to hold talks on easing East-West tension in Ukraine.

An index of global equity markets clung to modest gains, currency and bond markets stabilized and oil prices dipped again as the West stepped up efforts to persuade Moscow to pull its forces back in Crimea and avert the risk of war. Russian President Vladimir Putin said on Tuesday that military force would be used only as a last resort.

Investors, while awaiting developments between Russia and the West, turned their focus to what the European Central Bank might to do on Thursday to support the region's fragile economy and the U.S. government's latest job snapshot on Friday.

"The market is generally sideways until Friday's jobs report," said David Molnar, managing director at HighTower San Diego

Wall Street shares were little changed, with the Standard & Poor's 500 index hovering near its record high close set on Tuesday.

Softer-than-expected jobs data from U.S. payroll processor ADP (Frankfurt: W7L.F - news) nicked optimism over Friday's U.S. non-farm payrolls figures, while a separate private gauge of U.S. service sector activity fell to its weakest level in four years in February, though it still pointed to expansion in that sector. Investors seemed to chalk up the weakness overall to the weather.

In early afternoon trading, the Dow Jones industrial average was down 30.99 points, or 0.19 percent, at 16,364.89. The Standard & Poor's 500 Index was up 1.06 points, or 0.06 percent, at 1,874.97. The Nasdaq Composite Index was up 8.27 points, or 0.19 percent, at 4,360.25.

A measure of European shares, which surged more than 2 percent on Tuesday to spur a global rebound, ended down 0.06 percent at 1,343.99.

In Asia, Tokyo's Nikkei climbed 1.2 percent.

Russian stocks and the rouble fought off early weakness as investors decided Moscow was dialing down the intensity of its rhetoric over Ukraine.

Putin said he did not want political tension to detract from economic cooperation with Russia's "traditional partners."

The calmer geopolitical view kept the yen under pressure after a heavy reversal on Tuesday. The dollar was last buying 102.37 yen, moving away from a one-month low of 101.20 hit on Monday.

The relative calm in Crimea, where Russian intervened this past weekend, allowed attention in Europe to drift back toward Thursday's meeting of European central bankers.

The euro edged down 0.1 percent to $1.3731 overnight and held firm versus the yen at 140.53 yen. The German bond market's general safe-haven appeal waned, sending 10-year Bund yields up to 1.61 percent.

ECB policymakers remain under pressure either to cut interest rates again or use additional unconventional measures to fend off the threat of ultra-low inflation turning into something more damaging.

Analysts at Citi said in a note that their base-case expectation was that the bank would cut rates by 15 basis points to 0.10 percent. But many others think it will hold off for now.

EMERGING MARKETS UNDER PRESSURE

The tensions between Russia and the West have added to pressure on emerging markets. Some are already struggling to cope with investors shifting away because the U.S. Federal Reserve is reducing its flow of cheap funding. Emerging market equities have had 22 consecutive weeks of outflows, according to Bank of America (TLO: BAC.TI - news) -Merrill Lynch data.

"The big question we are all thinking about is when to go back into emerging markets," said Hans Peterson, global head of asset allocation at SEB (Paris: FR0000121709 - news) investment management. "It might take a few more weeks before we see some stability in U.S. data, so we are probably still a bit away from the entry point."

The MSCI index on emerging market equities was up 0.46 percent at 960.55, although it was still 4.6 percent lower so far in 2014.

In the energy market, Brent crude futures fell $1.06, or .97 percent at $108.24 a barrel. U.S. oil futures lost $1.41 or $1.36 percent at $101.92.

Spot gold, another safe-haven asset that rose on the Russia-West tensions, gained 0.1 percent to $1,339.99 an ounce after dropping 1.2 percent on Tuesday.