DJI- NEW YORK, June 19 (Reuters) - U.S. stocks rose on Tuesday on hopes that the Federal Reserve will agree to extend stimulus measures as the economy struggles to recover and the euro zone's debt crisis gets worse.
The S&P 500 has gained 7.2 percent from a five-month intraday low reached on June 4. On Tuesday, the benchmark index closed above its 50-day moving average of 1,346.90 for the first time in seven weeks. But the sharp gains leave the market vulnerable if the outcome of Wednesday's Fed meeting doesn't meet market expectations.
"People are anticipating some type of response from the Fed tomorrow, and are buying or covering shorts in anticipation of that," said Paul Zemsky, head of asset allocation at ING Investment Management in New York. "There's a risk the market gets disappointed."
The Dow Jones industrial average <.DJI> gained 95.51 points, or 0.75 percent, to 12,837.33 at the close. The Standard & Poor's 500 Index <.SPX> advanced 13.20 points, or 0.98 percent, to 1,357.98. The Nasdaq Composite Index <.IXIC> rose 34.43 points, or 1.19 percent, to close at 2,929.76.
NYMEX- NEW YORK, June 19 (Reuters) - U.S. crude futures rebounded on Tuesday as investors bet that Federal Reserve policymakers, who are holding a two-day meeting, will agree to provide further stimulus to the sluggish economy and that inventory data will show a drawdown in crude stocks.
Hopes that Greece will shortly form a coalition government and renegotiate its bailout package with lenders added to positive sentiment.
News that Iran hoped for a new round of talks with world powers over its nuclear program after its latest negotiations were deadlocked had helped pull prices lower, traders said.
Euro zone worries persisted after a German government official said that there was no discussion at the G20 summit in Mexico this week about using Europe's rescue funds to buy up the bonds of stricken members of the euro zone.
On the New York Mercantile Exchange, crude for July delivery settled at $84.03 a barrel, up 76 cents, or 0.91 percent, after trading between $82.28 and $84.41.
CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade surged to a one-month high on Tuesday on fresh export business and worries about stressful crop weather threatening yields in the U.S. Midwest, traders said.
Front-month soybeans were up 3.7 percent by the end of pit trading at 1:15 p.m. CDT (1815 GMT), the biggest daily rise in eight months. The contract reached an intraday peak of $14.51-1/2 per bushel, the highest spot soy price since May 10.
November soybeans "gapped" higher on the open -- the contract's low was above the previous day's high -- in a bullish show of strength in the market, analysts said.
Additional support was from declining crop ratings. USDA said 56 percent of the U.S. soybean crop was rated in good to excellent condition as of Sunday, a drop from 60 percent the previous week.
Private analyst Oil World cut its forecast of U.S. Aug. 31 soybean inventories to 4.2 million tonnes, from 4.6 million in May, and down from 5.85 million on Aug. 31, 2011. The firm cited strong export demand due to poor crops in Brazil and Argentina.
FCPO- SINGAPORE, June 19 (Reuters) - Malaysian palm oil futures closed higher on Tuesday on expectations of increased demand due to concerns that dry U.S. weather could damage the soybean crop, tightening global edible oil supply.
A victory by pro-bailout parties in the Greek polls over the weekend had sent palm oil futures to close just below the 2,900-ringgit mark on Monday.
But as optimism has faded in broader financial markets, dry weather has come into focus as the U.S. Department of Agriculture (USDA) said unfavourable weather had damaged soybean crop quality.
"Prices should remain positive with the Greeks behind us. Dry weather in the U.S. Midwest also supports a bullish stance," said a trader with a local commodities brokerage in Malaysia.
Benchmark September palm oil futures on the Bursa Malaysia Derivatives Exchange gained 1.7 percent to close at 2,948 ringgit ($934) per tonne, after rising as high as 2,959 ringgit.
Traded volumes stood at 39,877 lots of 25 tonnes each, much higher than the usual 25,000 lots.
REGIONAL EQUITY- June 19 (Reuters) - Southeast Asian stock markets gained on Tuesday with Malaysia hitting a two-month high, but renewed concerns over the euro zone trimmed volumes.
Malaysia <.KLSE> gained 0.8 percent with a $13.28 million in foreign inflows, while Singapore <.FTSTI> and Thailand <.SETI> added 0.6 percent and 0.8 percent respectively, while the Philippines <.PSI> rose 0.6 percent.
Optimism over a possible solution to Greece's debt crisis eroded as concerns over Spain's borrowing cost hit investor appetite for risky assets.
"Markets are still likely to remain choppy for a while," said Chang Chiou Yi, a regional strategist at CIMB-GK Research. Indonesia <.JKSE> ended 0.5 percent firmer despite $5.2 million net in foreign selling.
"I think the policy risk concerns on Indonesia is overplayed," she said. "The market is domestically driven with solid earnings growth and should hold up well. Even in global growth weakness, the Indonesian market has its own demand support."
