DJI- NEW YORK, Aug 6 (Reuters) - U.S. stocks closed at three-month highs for the second day in a row on Monday, extending last week's rally on the hope for more assistance for the troubled euro zone.
The S&P 500 rose to its highest point since early May, but pared its gains going into the close. The benchmark index also failed to breach 1,400, a level that could spur further buying if convincingly broken. The S&P 500 hasn't closed above the 1,400 level since May 2.
Sentiment in Spanish and Italian bond markets - the forefront of the three-year debt crisis - improved, with two-year Spanish yields falling to 3.42 percent on Monday, less than half of a late July high of over 7 percent. (nL6E8J6ATV)
European Central Bank President Mario Draghi has said the ECB may buy short-dated bonds to lower borrowing costs to help Europe, which has been mired in a debt disaster. European shares closed at four-month highs. (nL6E8J6BIH)
"Nothing has been fixed in Europe, but things seem to be getting better, and it seems unlikely that there will be any kind of real blow-up," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York. "I'm worried I may be too bearish."
Manley said he saw the S&P 500 trading in a range between 1,250 and 1,450, "which will likely persist for a while, with continued huge volatility."
Wall Street rallied on Friday with the S&P 500 marking its fourth straight week of gains on a strong U.S. jobs report and renewed hope that European authorities would act to contain the euro zone's debt crisis through ECB purchases of Italian and Spanish bonds.
Meanwhile, a group of investors will rescue embattled market maker Knight Capital Group Inc KCG.N in a $400 million deal that keeps the company in business, Knight said on Monday. But it comes at a huge cost to investors. The stock fell 24.2 percent to $3.07. (nL2E8J60KK) (nL2E8J52HY)
The Dow Jones industrial average .DJI rose 21.34 points, or 0.16 percent, to 13,117.51 at the close. The Standard & Poor's 500 Index .SPX gained 3.24 points, or 0.23 percent, to 1,394.23. The Nasdaq Composite Index .IXIC advanced 22.01 points, or 0.74 percent, to end at 2,989.91.
Of the 411 companies in the S&P 500 that have reported second-quarter earnings through Monday morning, 67.4 percent have reported earnings above analysts' expectations, near the four-quarter average of 68 percent, according to Thomson Reuters data.
About 60 percent of stocks traded on the New York Stock Exchange closed higher while on the Nasdaq, 59 percent of stocks closed higher.
Volume was light, with about 5.33 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 7.84 billion.
NYMEX- NEW YORK, Aug 6 (Reuters) - U.S. crude oil futures ended higher on Monday for a second straight session, lifted by stronger equities and turmoil in the Middle East which raised the geopolitical risk premium.
CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell nearly 3 percent and most-active November SX2 hit a one-week low as improved weather conditions in the U.S. Midwest boosted yield prospects, traders said.
FCPO- SINGAPORE, Aug 6 (Reuters) - Malaysian crude palm oil ended flat on Monday as expectations of higher stocks in No.2 producer Malaysia erased higher risk appetite on better-than-expected U.S. jobs data.
* Rains over the weekend across most of the U.S. Midwest and forecasts for more rain this week will help relieve stress on drought-hit crops, an agricultural meteorologist said. (nL2E8J6108)
• Benchmark November soybeans SX2 unofficially closed below its 20-day moving average for the first time since June 5.
• CBOT soymeal and soyoil followed soybeans to close lower, but soyoil gained against soymeal on oil/meal spreading.
• Analytics firm Celeres projected Brazil's 2012/13 soybean crop at 78.1 million tonnes, on plantings of a record 27 million hectares. (nL2E8J674S)
• Traders expected USDA in its weekly crop progress report later on Monday to report U.S. soybean ratings at 28 percent good to excellent, down 1 percentage point from the previous week. (nC3E8H101X)
• USDA confirmed sales of 106,000 tonnes of U.S. soybeans to China for 2012/13 delivery. (nW1E8I200A)
• USDA reported export inspections of U.S. soybeans in the latest week at 12.720 million bushels, within trade expectations for 12 million to 16 million.
• CBOT reported no soybean or soymeal deliveries against August futures, while soyoil deliveries totaled 1,296 contracts.
Investor optimism also grew on talks of more stimulus measures by European Central Bank to tackle the region's crisis but caution remained as traders eye stocks data by industry regulator Malaysian Palm Oil Board (MPOB) due later this week.
"In the near term, the upcoming MPOB’s July inventory data could swell above the psychological range of 2 million tonnes," said Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, in a note.
The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange ended flat at 2,918 ringgit ($940) per tonne. Palm oil posted a 0.3 percent loss last week, its fourth straight weekly loss.
Traded volumes stood at 21,893 lots of 25 tonnes each, thinner than the usual 25,000 lots.
Technicals look bearish with Reuters market analyst Wang Tao saying palm oil will fall to 2,880 ringgit as a downtrend from 3,161 ringgit has resumed. (nL4E8J60FU)
Market players are waiting for fresh trading cues from a key supply-demand report from the U.S. Department of Agriculture later this week that will quantify soy crop damage from the worst drought in 56 years. GRA/
A lower quality of soybean crop contributing to a drop in soybean oil supply could shift more vegetable oil demand to the cheaper palm oil.
Weather concerns closer to Southeast Asia are also in focus as El Nino's dry weather pattern could return by end of the year and hurt production for top palm oil producers Indonesia and Malaysia.
Malaysian palm oil exports in July suffered a double-digit fall from a month ago, reflecting slowing demand from top food buyers China and India, according to cargo surveyor data. PALM/ITS PALM/SGS
Oil retreated from last week's gains, easing towards $108 a barrel on Monday as investors took profits and awaited more clues on the health of the global economy and the outlook for oil demand. O/R
REGIONAL EQUITY- Aug 6 (Reuters) - Most Southeast Asian stock market gained on Monday with Singapore hitting a one-year high as investors bought into the region's risky assets after stronger-than-expected U.S. jobs data and emerging optimism for European action on the debt crisis.
Singapore's Straits Times Index .FTSTI ended 0.7 percent firmer to its highest since Aug. 4, last year, led by financials, with DBS Group Holdings Ltd DBSM.SI and Oversea-Chinese Banking Corporation Ltd OCBC.SI gaining more than 1 percent each.
Thailand .SETI and Malaysia .KLSE gained 0.9 percent and 0.3 percent respectively in strong volumes, close to their three-week highs.
Indonesia .JKSE edged up 0.1 percent and Vietnam .VNI, the region's smallest bourse, rose 1.2 percent.
