* 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 mostly advanced on Thursday, while the S&P 500 closed at a record high, as comments from U.S. Federal Reserve Chair Janet Yellen offset concerns over tension in Ukraine and Russia.
Yellen signaled the central bank was likely to stay the course in its current plan to scale back its stimulus measures and said unusually harsh winter weather appears to be behind recent 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 she made it clear the Fed is ready to stand up and do what's necessary to continue to support the economy, and that's exactly what Wall Street wanted to hear," said Adam Sarhan, chief executive officer of Sarhan Capital in New York.
But gains were held in check as a result of tensions in Ukraine, 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 White House warned Russia to respect Ukraine's sovereignty 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 low after its central bank abandoned its managed exchange rate policy.
The geopolitical uncertainty caused investors to seek the safety of U.S. Treasuries, driving yields to two-week lows. The yield on the 10-year note was 2.646 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 toward emerging markets is not great. The concern is this could develop into a proper civil war in Ukraine that splits the country," said Manik Narain, strategist at UBS (Xetra: UB0BL6 - news) in London.
On Wall Street the S&P 500 advanced to close at a record high of 1,854.31, breaking its prior high set Jan. 15, after Yellen's comments and an unexpected rise in durable goods orders, excluding transportation. The index had been unable to hold above the record despite several attempts this week.
If the view holds that harsh winter weather is to blame for a recent slowing in economic growth, 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 purchases completely by the end of the year.
The Dow Jones industrial average rose 74.3 points or 0.46 percent, to 16,272.71, the S&P 500 gained 9.15 points 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 tracks shares in 45 nations, gained 1.30 points, or 0.32 percent, to 408.67.
Yellen's testimony curbed declines in Europe, with the FTSEurofirst 300 index, closing down 0.2 percent after an earlier fall of 1 percent, and the euro gained 0.2 percent to $1.371 after it dropped to a two-week low of $1.3641.
Aside from tensions in Ukraine, declines in Europe were stemmed by a downward revision to Spain's fourth-quarter gross domestic product and ECB data that 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, due on Friday.
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 does not become mired in deflation.
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 German Bunds.
Copper touched a three-month low below $7,000 a tonne, extending its losses over the past week on recent concerns about slower growth in China, before rebounding to $7,025 a tonne.
Gold prices were flat as spot gold edged down 1 cent to $1,330.69 an ounce, well off a high of $1,345.35 hit earlier in the session, while U.S. COMEX gold futures for April delivery settled up $3.80 at $1,331.80 an ounce.
Brent crude fell 56 cents to settle at $108.96 a barrel and U.S. oil settled 19 cents lower to $102.40 a barrel as the civil unrest in Ukraine curbed overall risk appetite and fueled fears that it would slow growth in Europe and lessen oil demand.