Trader's Highlight

DOW JONES-NEW YORK, Dec 29 (Reuters) - U.S. stocks rallied on Thursday, moving the S&P 500 back in positive territory for 2011 ahead of the last trading day of the year, on more positive signals on the U.S. economy.

The S&P 500 edged above its 200-day moving average, a key measure of the market's long-term momentum, but scant volume increased volatility, and made the gains harder to trust.

The Dow Jones industrial average <.DJI> shot up 135.63 points, or 1.12 percent, to 12,287.04 at the close. The Standard & Poor's 500 Index <.SPX> gained 13.38 points, or 1.07 percent, to 1,263.02. The Nasdaq Composite Index <.IXIC> advanced 23.76 points, or 0.92 percent, to 2,613.74.

NYMEX-NEW YORK, Dec 29 (Reuters) - U.S. crude futures edged up on Thursday as tensions between Iran and the West, a stronger euro and an equities rally prompted investors to cover short positions after oil was pressured by data showing crude stockpiles rose last week in the United States.

On the New York Mercantile Exchange, February crude rose 29 cents, or 0.29 percent, to settle at $99.65, having traded from $98.30 to $99.92.

CBOT-SOYBEAN, Soybean futures at the Chicago Board of Trade fell on profit-taking after the market hit a seven-week high this week and some forecasts called for much-needed rain in South America, traders said.

Trade expecting USDA on Friday to report export sales of U.S. soybeans in the latest week at 300,000 to 600,000 tonnes.

FCPO-SINGAPORE, Dec 29 (Reuters) - Malaysian crude palm oil futures dropped on Thursday in cautious year-end trading, but losses were limited by worries that heavy rains may hit production in second-largest producer Malaysia.

Weaker global markets also prompted investors to book profits as palm oil eased from a 5-week high on Wednesday, adding to its 16.7 percent loss this year.

Palm oil is set to post its first annual decline since 2008, weighed down by concerns the euro zone debt crisis could stall economic growth and commodity demand.

Benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange settled 0.9 percent lower at 3,155 ringgit ($1,000) per tonne. Prices touched 3,205 ringgit on Wednesday, a level unseen since Nov. 22.

REGIONAL EQUITIES-BANGKOK, Dec 29 (Reuters) - Most Southeast Asian bourses edged higher on Thursday, helped by late bargain-hunting in big caps and dividend-yielding stocks such as banks and telecoms, but trade remained quiet, especially ahead of an Italian debt auction that kept investors nervous.

The region's markets have been range-bound this week, with holidays keeping investors away and the euro zone debt crisis still clouding the global economic outlook.

Malaysian shares <.KLSE> inched up 0.17 percent to their highest in more than four months after registering small gains over the past five sessions. Singapore's main index <.FTSTI> edged up 0.2 percent, after an early fall to a one-week low.

Trader's Highlight

DOW JONES-NEW YORK, Dec 28 (Reuters) - U.S. stocks fell more than 1 percent on Wednesday after a hefty year-end rally and the S&P 500 erased gains for the year on renewed concerns about the euro zone's financial health.

The selloff followed the euro's slide to an 11-month low against the U.S. dollar as regional debt worries prompted a wave of selling, with thin trading exacerbating volatility.

A recent rally on Wall Street had been supported by a series of positive U.S. economic data that encouraged investors to shift their focus from fears about Europe's debt crisis sparking a global recession to optimism that the U.S. economy was on track to recovery.

The Dow Jones industrial average <.DJI> fell 139.94 points, or 1.14 percent, to end at 12,151.41. The Standard & Poor's 500 Index <.SPX> dropped 15.79 points, or 1.25 percent, to 1,249.64. The Nasdaq Composite Index <.IXIC> lost 35.22 points, or 1.34 percent, to 2,589.98.

NYMEX-NEW YORK, Dec 28 (Reuters) - U.S. crude futures fell almost 2 percent on Wednesday as the dollar strengthened and worries about the euro zone grew, sparking a broad sell-off across commodities and equities.

The euro neared a one-year low against the dollar after data showed euro zone banks were still hoarding cash rather than lending it out. This unnerved markets ahead of an important Italian bond sale and raised concerns about economic growth and oil demand.

On the New York Mercantile Exchange, February crude fell $1.98, or 1.95 percent, to settle at $99.36 a barrel, having traded from $99.11 to $101.71.

CBOT-SOYBEAN, Chicago Board of Trade soybean futures closed lower, breaking a streak of eight straight winning sessions due to some mild profit taking, traders said.

Weakness in the crude oil market also added pressure to the soy complex. Soyoil futures also fell but soymeal prices rose amid a slowdown in the pace of crushing.

Brazil is the second largest global soybean producer and is expected to surpass the United States to be the largest exporter of soybeans in 2011-12, the current marketing year, according to USDA data.

FCPO-KUALA LUMPUR, Dec 28 (Reuters) - Malaysian crude palm oil futures climbed to a near five-week high on Wednesday as dry weather in South America sparked concerns about lower soybean yields, potentially tightening soyoil supplies.

Despite the rise, prices of the tropical oil are still on course for their first annual decline since 2008 on worries the euro zone debt crisis could stall economic growth and commodity demand.

Benchmark March palm oil futures <0#FCPO:> on the Bursa Malaysia Derivatives Exchange settled up 0.8 percent at 3,185 ringgit ($1,000) after going as high as 3,205 ringgit -- a level unseen since Nov. 22.

REGIONAL EQUITIES-BANGKOK, Dec 28 (Reuters) - Most Southeast Asian stock markets drifted lower on Wednesday in light trading as market players took profits on recent gainers such as telecom shares.

Stocks in Singapore <.FTSTI>, Indonesia <.JKSE> and the Philippines <.PSI> finished with small declines for a second session. Thai stocks <.SETI> ended flat, reversing early losses that came on top of four sessions of falls. Malaysia <.KLSE> recouped early losses to end up 0.2 percent at around its highest in more than four months.

Traders saw little prospect of further gains before the year ended.