Trader's Highlight

DJI-NEW YORK, July 7 (Reuters) - Wall Street closed lower on Monday after a wave of concern over mortgage providers' capital adequacy spoiled an early stocks rally triggered by a plunge in commodity prices led by oil. In volatile trading, investors bailed out stocks after a brokerage report that Fannie Mae and Freddie Mac may need to raise more capital. The report by Lehman Brothers sparked weakness throughout the financial sector. The Dow Jones industrial average <.DJI> fell 56.58 points, or 0.50 percent, at 11,231.96. The Standard & Poor's 500 Index <.SPX> fell 10.59 points, or 0.84 percent, at 1,252.31. The Nasdaq Composite Index <.IXIC> fell 2.06 points, or 0.09 percent, at 2,243.32.

CBOT-CHICAGO, July 7 (Reuters) - Chicago Board of Trade grains and soy complex closing trends on Monday.

SOYBEANS - July down 69 cents at $15.89 per bushel, new-crop November down 70-cent limit at $15.61. Market tumbles despite news Argentina lawmakers on Saturday approved a farm export tax hike.Informa pegs U.S. soy crop at 3.019 billion bushels, below USDA's current forecast for 3.105 billion.

SOYOIL - July down 2.44 cents at 64.89 cents per lb. Spillover weakness from soybeans and crude oil.

NYMEX-NEW YORK, July 7 (Reuters) - U.S. crude futures dropped sharply on Monday as traders booked profits after last week's record above $145 a barrel and on optimism that Iran and the West may show flexibility in resolving an impasse over Iran's nuclear program. August crude settled down $3.92, or 2.7 percent, at $141.37 a barrel, trading from $139.50 and $145.68.

FCPO-KUALA LUMPUR, July 7 (Reuters) - Malaysian crude palm oil futures dropped more than 3 percent on Monday as a build-up in supplies and weakening crude oil prices weighed on the market. The benchmark September contract on the Bursa Malaysia Derivatives Exchange settled down at 3.25 percent, or 118 ringgit, to 3,512 ringgit ($1,076) a tonne.

Regional Equities-SINGAPORE, July 7 (Reuters) - Singapore and battered Philippine stocks rose on Monday, tracking a rise in Asian markets.

Thailand <.SETI> fell 1.7 percent, dragged by energy shares as oil prices eased, while Malaysia <.KLSE> shed 0.6 percent to close at another 16-month low amid political uncertainties.