Trader's Highlight

DJI-NEW YORK, May 11 (Reuters) - U.S. stocks nearly erased a three-day rally on Wednesday as energy and other commodity shares sank, feeding worries about the market's ability to stay on its upward path.

The second major breakdown in commodities in a week fueled selling in other risky assets, including stocks. A stronger dollar and data showing a rise in U.S. fuel supplies sent crude oil prices down more than 5 percent, and the S&P energy index <.GSPE> slid 3 percent.

The Dow Jones industrial average <.DJI> was down 130.33 points, or 1.02 percent, at 12,630.03. The Standard & Poor's 500 Index <.SPX> was down 15.08 points, or 1.11 percent, at 1,342.08. The Nasdaq Composite Index <.IXIC> was down 26.83 points, or 0.93 percent, at 2,845.06.

NYMEX-NEW YORK, May 11 (Reuters) - U.S. crude oil futures fell more than 5 percent on Wednesday after an unexpected jump in gasoline inventories reported by the government sent RBOB gasoline futures into a tailspin.

RBOB gasoline futures' 25-cent slump intraday triggered a five-minute trading halt on the New York Mercantile Exchange for the motor fuel, heating oil and crude oil futures, the first such trading stoppage since the 2008 financial crisis.

On the New York Mercantile Exchange, June crude fell $5.67, or 5.46 percent, to settle at $98.21 a barrel, trading from $97.50 to $104.60.

CBOT-U.S. soybean ended lower, although well off session lows, on Wednesday as traders digested a USDA supply/demand report that included a much higher-than expected 2010/2011 soybean carryover estimate of 170 million bushels, traders said.

The agency's estimate for the 2011/2012 marketing year was 160 million bushels, slightly lower than the average estimate of 167 million bushels.

FCPO-KUALA LUMPUR/JAKARTA, May 11 (Reuters) - Malaysian palm oil futures extended gains for a third day on Wednesday ahead of a U.S. agriculture report that may show tighter grains and oilseeds supply in the months to come.

The U.S. Department of Agriculture May supply and demand report is expected to confirm the U.S. winter wheat crop has shrunk to its lowest in five years, a scenario that will boost soybeans and palm oil.

Palm oil has lost about 14 percent so far this year on rising stocks and still weak demand. It also fell to a six month low last week along with a broad sell-off in commodities as traders initially fretted over the state of the U.S. economy and cut risk taking.

At the close, the benchmark July crude palm oil contract on Bursa Malaysia Derivatives rose 0.3 percent to 3,269 Malaysian ringgit ($1,093) per tonne. It earlier hit a peak at 3,283. Overall traded volume was 12,155 lots of 25 tonnes each, compared with 11,373 lots on Tuesday.

REGIONAL EQUITIES-BANGKOK, May 11 (Reuters) - Southeast Asian stock markets advanced further on Wednesday, with banking stocks leading the pack because of the positive loan growth outlook, and investors also picked selected energy and resource companies with good earnings prospects.

Most markets saw trading volume pick up to their 30-day average, despite some caution over the euro zone debt crisis and uncertainty over whether Greece would need additional financial aid.

Stocks in Malaysia <.KLSE>, Thailand <.SETI> and the Philippines <.PSI> extended their gains into a third session and hit their highest levels in almost two weeks. Singapore <.FTSTI>, Indonesia <.JKSE> and Vietnam <.VNI> hovered around a one-week high.

Among outperformers, Malaysian bank Hong Leong surged 4.5 percent, Singapore's DBS Group Holdings , Southeast Asia's biggest lender, climbed 1.5 percent and state-run Krung Thai Bank jumped 2 percent.

Optimism about the earnings outlook of resource-related firms lifted share prices despite the volatility in global oil markets.

Singapore-listed commodities trading firm Noble Group gained 3.3 percent. It reported a 77 percent rise in first-quarter net profit late on Wednesday, helped by strong volume growth and higher commodity prices.