Trader's Highlight

DJI-NEW YORK, Jan 12 (Reuters) - U.S. stocks slid in a broad selloff on Tuesday as investors pummeled financials on concerns about a potential government levy on banks, while Alcoa Inc's disappointing results tempered optimism about the economic
recovery.

President Barack Obama is considering a levy on financial services firms to recoup losses from the Troubled Asset Relief Program as part of the fiscal 2011 budget, according to a senior U.S. official.

The potential fee could raise as much as $120 billion to cover taxpayer losses stemming from government bailouts, according to official sources.

Investors feared that a levy might hurt bank profits at a time when the sector was trying to recover from the financial crisis, analysts said.

The Dow Jones industrial average <.DJI> dropped 36.73 points, or 0.34 percent, to 10,627.26. The Standard & Poor's 500 Index <.SPX> fell 10.76 points, or 0.94 percent, to 1,136.22. The Nasdaq Composite Index <.IXIC> slid 30.10 points,
or 1.30 percent, to 2,282.31.

News that China's central bank was tightening monetary conditions in response to increasing concerns about the economy overheating added to the negative tone.

NYMEX-NEW YORK, Jan 12 (Reuters) - U.S. crude oil futures fell for the second day in a row on Tuesday after a surprise bank reserve tightening in China raised concerns that Chinese demand for petroleum could fall.

China on Tuesday raised the proportion of deposits that banks must hold in reserve, another sign that the fast-growing Asian country has started to tighten monetary policy.

The American Petroleum Institute will release oil inventory data at 4:30 p.m. EST (2130 GMT) on Tuesday.

The U.S. Energy Information Administration's report will be released at 10:30 a.m. EST (1530 GMT) on Wednesday.

On the New York Mercantile Exchange, February crude settled at $80.79 a barrel, down $1.73, or 2.1 percent, trading from $80.24 to $82.34.

CBOT-SOYBEANS - January down 32-1/4 cents per bushel at $9.69-1/2. March down 32-1/2 cents per bushel at $9.78.

Pressure from USDA's crop report that showed U.S. 2009 soy production and ending stocks above trade estimates. Good crop weather in South America, falling crude oil also weigh. Soybeans touch lowest level since Nov. 12.

USDA put 2009 U.S. soy production at a record 3.361 billion bushels, above the average trade estimate for 3.338 billion.

USDA raised U.S. 2009/10 soy ending stocks to 245 million bushels, above an average estimate for 235 million.

CBOT-SOYOIL - January down 0.93 cent per lb at 38.26 cents per lb. March down 0.92 at 38.63. Following soybeans and lower crude oil.

FCPO-JAKARTA, Jan 12 (Reuters) - Malaysian crude palm oil futures dropped 1.1 percent on Tuesday to the weakest closing level in nearly three weeks amid faltering crude oil prices and lingering concerns over stock build up, traders said.

The benchmark March contract on the Bursa Malaysia Derivatives Exchange settled down 29 ringgit at 2,556 ringgit ($764.69), the lowest level since Dec. 24. Overall volume was 17,942 lots of 25 tonnes each.

REGIONAL EQUITIES-BANGKOK, Jan 12 (Reuters) - Indonesia's benchmark index rose
one percent to its highest level in almost two years as banking shares rose on positive outlook, while most other Southeast Asian stock markets slipped back after recent strong runs.

Singapore's index <.FTSTI> fell 0.6 percent after a two-day run to 17-month highs, with Singapore Telecoms dropping 1.7 percent and palm plantation stock Golden Agri losing 4.7 percent after an almost seven percent surge on Monday.

Malaysia's index <.KLSE> inched down 0.1 percent at 1,292.85. Citigroup said it has raised its year-end target for Malaysia's benchmark share index to 1,400 points from 1,300 points.

Investors took profits on recent gainers such as palm plantation firm Sime Darby which lost one percent as Malaysian crude palm oil futures dropped to near three-week lows on Tuesday. Maxis , which gained on Monday, was down almost one percent on Tuesday's session.