* MSCI world equity index little changed at 311.28
* Buffett invests $5 bln in Goldman Sachs
* Mood still fragile on uncertainty over Washington bailout
By Natsuko Waki
LONDON, Sept 24 (Reuters) - World stocks steadied on
Wednesday and safe-haven government bonds rose after Warren
Buffett's investment in Goldman Sachs <GS.N> failed to calm
anxiety over the prospects for Washington's $700 billion bank
bailout.
Billionaire investor Buffett's Berkshire Hathaway Inc
<BRKa.N> <BRKb.N> will invest $5 billion in Goldman, a major
boost for the Wall Street bank whose shares fell 50 percent from
their 2007 record high in this month's market turmoil.
However, the news failed to significantly boost risky assets
after the U.S. government's push for quick congressional
approval of its financial rescue plan hit a wall of opposition
on Tuesday among senators who said the plan puts taxpayers at
risk.
Federal Reserve chairman Ben Bernanke testifies again later,
after warning lawmakers on Tuesday that a failure to act could
doom the economy to a recession.
"The market is still nervous about the outcome of the
proposed U.S. plan as politics seems to be making the deal more
complicated," said Ryuji Shimai, market analyst at Shinko
Securities in Tokyo.
The FTSEurofirst 300 index <> erased early gains to
stand flat on the day while the MSCI world equity index
<.MIWD00000PUS> was broadly steady.
U.S. stock futures <SPc1> were up more than 1 percent,
pointing to a stronger start on Wall Street later.
"Buffett's legendary status as a value investor gives the
bulls reason for optimism, as some will see his move as a sign
to call the bottom of the recent declines," said Chris Hossain,
senior sales manager at ODL Securities.
The December bund future <FGBLc1> rose 30 ticks as jittery
investors sought safety in government bonds.
Strains in the interbank money market lingered, with
overnight dollar rates <USDOND=> rising 195 basis points above
the Fed's target rate at one point, before falling to stand
around 30 bps above the rate.
The Fed moved for the second time within 24 hours to provide
liquidity, acting in concert with Australia and Scandinavia,
while the euro zone, Britain, Japan and Australia injected
billions of dollars into their banking systems.
Once a byword for safety and liquidity, the short-term
lending market where banks lend to each other has repeatedly
seized up in the financial crisis because of increasing worries
over the creditworthiness of borrowers.
The dollar <.DXY> was steady against a basket of major
currencies while the euro stood unchanged on the day at $1.4654
<EUR=>.
Emerging sovereign spreads <11EMJ> tightened 3 basis points
while emerging stocks <.MSCIEF> rose 0.4 percent on the day.
U.S. light crude <CLc1> rose 1.6 percent following forecasts
of a drop in U.S. crude stocks. Gold rose <XAU=> edged lower to
$887.80 an ounce.
(Editing by Ruth Pitchford)
