DJI- NEW YORK, July 9 (Reuters) - U.S. stocks slipped in light trading on Monday, weighed down by weak economic data from Asia and signs of economic trouble in Europe, underscored by higher Spanish and Italian bond yields.
Monday's decline, the third in a row for the S&P 500 index, comes as quarterly earnings reports get under way. Investors are anxious to see what impact weak demand in Europe and slowing growth in Asia have had on corporate America.
"We think 2Q earnings for the S&P 500 will be OK this quarter ... we're calling for a small 2 percent beat. That said, we expect the tone of earnings season to be quite negative," said Jonathan Golub, chief strategist at UBS in New York.
Stocks pared losses late in the session, leaving indexes with just slight losses.
The Dow Jones industrial average .DJI ended down 36.18 points, or 0.28 percent, at 12,736.29. The Standard & Poor's 500 Index .SPX was down 2.22 points, or 0.16 percent, at 1,352.46. The Nasdaq Composite Index .IXIC was down 5.56 points, or 0.19 percent, at 2,931.77.
Volume was among the lightest of the year. About 5.1 billion shares changed hands on the New York Stock Exchange, the Nasdaq and Amex, compared with the year-to-date daily average of 6.85 billion shares.
Italian borrowing costs continued to rise on Monday while Spanish 10-year yields rose above 7 percent. That level is seen as unsustainable in the longer-term and reflecting doubts over how measures agreed last month to stem the euro zone debt crisis will be implemented.
In economic news, machinery orders in Japan fell at a record pace in May, while inflation in China eased to a 29-month low, suggesting falling demand from Europe and the United States for exports. (nL3E8I90CZ) (nL6E8I900D)
The overseas data comes on the heels of Friday's disappointing U.S. jobs report, which showed non-farm payrolls grew by only 80,000 in June. (nL2E8I56V0)
From a technical standpoint, the S&P 500 remains about 10 points above the 1,342 support level and the 50-day moving average at 1,340, said Randy Frederick, managing director of active trading & derivatives at Charles Schwab.
NYMEX- NEW YORK, July 9 (Reuters) - U.S. crude oil futures ended almost 2 percent higher Monday on fears that Norwegian production faced a complete shutdown after labor talks failed, said traders who also cited hopes that China will act to ease monetary policy to support its economy.
NYMEX crude for August delivery CLQ2 settled at $85.99 a barrel, gaining $1.54, or 1.82 percent, after trading from $84.00 to $86.48.
CBOT SOYBEAN- Spot soybean futures on the Chicago Board of Trade set an all-time high and ended up nearly 3 percent on fears that continued dry weather in the U.S. Midwest would reduce yields, traders said.
* Front-month July soybeans Sc1 reached $16.79-1/2, the all-time highest spot soybean price on continuous charts, before paring gains, while nearly all other months set contract highs.
• Spot soymeal futures SMc1 set an all-time high at $490 a ton, with contract highs set in most back months.
• Sizzling temperatures abated in the U.S. Midwest over the weekend but light, scattered rains this week were expected to miss the areas that need it most - threatening continued stress to crops. (nL2E8I97A6)
• Traders expect USDA in its weekly crop progress report later on Monday to lower weekly soybean ratings to 40 percent good-to-excellent, from 45 percent the previous week. (nL2E8I93SK)
• CBOT reported no July deliveries of soybeans or soymeal; soyoil deliveries totaled 1,270 contracts, with no strong commercial stoppers.
• USDA reported export inspections of U.S. soybeans at 18.906 million bushels, above trade estimates for 10 million to 14 million.
• Trade expects USDA's July 11 supply/demand report to show a slight decline in U.S. 2011/12 soybean ending stocks but little change in 2012/13 ending stocks. (nL2E8I6ESK)
FCPO- KUALA LUMPUR, July 9 (Reuters) - Malaysian crude palm oil futures rose on Monday on worries that unfavourable weather, from the United States to India, could crimp oilseed production and tighten global supply of cooking oil during a peak season for Asian demand.
A shortfall in India's monsoon rains is the latest weather concern to hit edible oil markets as summer-sown crops such as soybeans will be affected, forcing the world's largest importer of edible oil to buy more alternative palm oil. (nL3E8I53EV)
Palm oil, which has lost 0.5 percent so far this year, is also now rising due to the drought in the United States, which is hurting soybean yields.
"Palm oil is taking a free ride. It will take more of the market from soybean oil, especially during the festival season on the Asian side," said a trader with a foreign commodities brokerage.
Benchmark September palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange ended the day up 0.7 percent or 23 ringgit at 3,153 ringgit ($990) per tonne.
Traded volumes stood at 18,615 lots of 25 tonnes each, lower than the usual 25,000 lots.
Technicals, however appeared negative. Reuters analyst Wang Tao said the tropical oil would revisit a July 5 low of 3,095 ringgit, as it had completed a rebound from the June 14 low of 2,838 ringgit. (nL3E8I9105)
Traders are expecting on Tuesday a slew of Malaysian export data for the first ten days of July which could show strong festival demand for the edible oil.
The Asian festival season starts with the Muslim observance of Ramadan, which begins around July 20, where a month of fasting in the day is followed by feasts in the evening.
The market is also on the lookout for industry regulator Malaysian Palm Oil Board's June palm oil stocks that will show a 14-month low because of strong demand chasing modest production growth.
Some analysts are on the watch for a brewing El Nino weather condition, which brings drought to palm oil producing Southeast Asia. Malaysia-based OSK Investment Bank raised its 2013 average price assumption for palm oil to 3,500 ringgit from 3,100 ringgit to factor in the weather anomaly.
REGIONAL EQUITY- BANGKOK, July 9 (Reuters) - Southeast Asian stock indexes fell in light volume on Monday, led down by energy linked stocks and index heavyweights, as weak job figures in the United States and cooling inflation in China kept investors on the sidelines.
Singapore's Straits Times Index .FTSI dropped 1.7 percent, its biggest one-day drop since June 5, and after eight consecutive sessions of gains.
The Philippine index .PSI also notched its biggest daily loss in five weeks, falling 1.8 percent and pushing further away from a record closing high of 5,369.98 set on July 5.
