Trader's Highlight

DJI- NEW YORK, Sept 17 (Reuters) - U.S. stocks fell on Monday in light trading after a rally that drove the S&P 500 last week to its highest level in nearly five years and as falling oil prices hit energy shares.

The decline broke a four-day streak of gains for the S&P 500. On Friday, both the Dow and the S&P 500 ended at highs not seen since December 2007. The rally came a day after the Federal Reserve unveiled new stimulus measures that could keep equities buoyed for months. The Fed's action followed a decision by the European Central Bank to support debt-ridden euro-zone nations by purchasing their debt.

Equities' move is mainly consolidation following last week's big move higher, said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

"I think the signal that the Fed gave last week is likely to have a lasting effect, and carry through to the end of the year," he said.

Financials, which were among the biggest gainers late last week, were among the sectors leading Monday's decline. The S&P financial index fell 1.1 percent. Bank of America Corp shares lost 2.6 percent to $9.30.

An S&P index of energy shares fell 0.8 percent, slipping in sync with oil prices, which tumbled sharply in afternoon trading. Exxon Mobil shed 0.4 percent to percent to $91.91.

The market's losses were limited by Apple Inc, which hit another all-time session high of $699.80 with demand for its new iPhone 5 exceeding initial supply. The company booked 2 million orders in one day and pushed the delivery date for some pre-orders to next month. The stock rose above $700 after the bell; it closed at $699.78, up 1.2 percent.

Volume was lower than average, with about 5.64 billion shares traded on the New York Stock Exchange, the Nasdaq and the Amex, compared with the year-to-date average daily closing volume of 6.54 billion. Many participants were out on Monday for the observance of Rosh Hashana, the Jewish New Year.

The Dow Jones industrial average slipped 40.27 points, or 0.30 percent, to end at 13,553.10. The Standard & Poor's 500 Index shed 4.58 points, or 0.31 percent, to 1,461.19. The Nasdaq Composite Index dropped 5.28 points, or 0.17 percent, to close at 3,178.67.

After the bell, shares of Advanced Micro Devices slid 12.7 percent to $3.50 after the company said its chief financial officer was leaving to pursue other opportunities. The stock closed the regular session at $4.01, up 2.8 percent.

The day's economic data offered more evidence of weakness in the economy. Factory activity in New York state contracted for a second month in a row in September, with the Empire State "business conditions" index falling to its lowest level in nearly 3-1/2 years, according to a report on Monday from the Federal Reserve Bank of New York. A national manufacturing survey by an industry group earlier this month showed the sector contracted for a third month in August.

Gold and other commodities also fell for the day, and the S&P 500 materials index slid 1.5 percent, leading the S&P 500's decline. JP Morgan cut its ratings on a number of metals companies, including AK Steel, which dropped 5.8 percent to $5.53.

Investors also focused on turmoil overseas. Protesters in Afghanistan and Indonesia burnt U.S. flags and chanted "Death to America" on Monday in renewed demonstrations over a film mocking the Prophet Mohammad.

Israeli Prime Minister Benjamin Netanyahu warned that Iran would reach the brink of being able to build a nuclear bomb in just six or seven months.

Major Japanese companies, including Nissan and Honda, announced factory shutdowns in China on Monday and Japanese expatriates were urged to stay indoors ahead of what could be more angry protests over a territorial dispute between Asia's two biggest economies.

The day's deal news included Lowe's Cos Inc saying it had withdrawn its C$1.8 billion ($1.86 billion) proposal to buy Rona Inc in the face of stiff opposition to the unsolicited bid for the Canadian home improvement retailer. Lowe's shares slipped 0.6 percent to $29.23.

General Electric Co shares shed 0.3 percent to $22.05 after sources familiar with the matter said the company has hired Morgan Stanley to review its 33 percent stake in Thailand's Bank of Ayudhya Pcl, which could potentially lead to a sale by the U.S. conglomerate of its near $2.2 billion holding.

Decliners outpaced advancers on the NYSE by nearly 2 to 1 and on the Nasdaq by about 5 to 3.

NYMEX- NEW YORK, Sept 17 (Reuters) - U.S. crude futures settled lower on Monday after recovering from losses suffered during a high-volume, rapid selloff that pushed crude briefly below its 200-day moving average intraday and followed last week's price surge on the Federal Reserve's launch of a stimulus program to bolster the economy.

  

CBOT SOYBEAN-  Soybean futures on the Chicago Board of Trade plunged the 70-cent single-day limit on Monday, hit by U.S. harvest pressure and talk of better-than-expected early yields, along with technical selling including fund-driven long liquidation,traders said.

* Additional pressure from ideas that rains this month in northern Brazil could allow farmers an early start planting soybeans for their 2013 harvest.

• Spot soybean futures fell 4 percent, their biggest daily decline in 18 months, to a near one-month low.
• Local media reported isolated rainfall Monday in Mato Grosso, Brazil's biggest soy state, which could encourage farmers after a three-month dry stretch during the southern hemisphere's winter. Farmers in Mato Grosso were allowed to start planting Sept. 15.
• Analysts expected USDA's weekly crop progress report due later on Monday to show the U.S. soybean harvest as 9 percent complete, up from 4 percent a week earlier.
• China's government plans to sell 400,000 tonnes of domestic soy from state reserves on Sept 27 to help boost supplies.
• USDA confirmed sales of 210,000 tonnes of U.S. soybeans to unknown destinations for delivery in 2012/13.
• USDA reported export inspections of U.S. soybeans in the latest week at 9.959 million bushels, below a range of trade estimates for 14 million to 18 million.
• A ship loading soybeans for China at Brazil's Santos port hit and damaged a grain elevator component that loads soy and corn into holds, shutting down the public grains terminal over the weekend, said logistics agent SC Commodities.
• Daily trading limits in CBOT soybeans for Tuesday's trade will widen to $1.05 per bushel while CBOT soymeal limits will widen to $30 a ton, after Monday's limit drop - CME Group.

  

FCPO- KUALA LUMPUR, Sept 14 (Reuters) - Malaysian palm oil futures rose on Friday after the U.S. Federal Reserve kicked off a third round of quantitative easing to stimulate its economy and as investors took up positions ahead of a long weekend.

The Fed said it will buy $40 billion of mortgage-backed debt each month in the world's largest economy, lifting global prices of oil, grains gold prices on expectations that global economy and commodity demand will continue to grow.

"The market is up on the back of yesterday's QE3 announcement. The market has also been oversold for quite some time and is now recovering a bit," said a trader with a foreign commodities brokerage.

"There is a lot of covering ahead of a 3-day holiday," the trader added. Local markets will be closed on Monday following the Malaysia Day public holiday, which falls on Sunday.

The benchmark November contract on the Bursa Malaysia Derivatives Exchange ended up 0.8 percent to 2,936 ringgit ($966.1) per tonne after going as high as 2,945 ringgit.

Total traded volume stood at 33,029 lots of 25 tonnes each, up from the usual 25,000 tonnes as trades locked in postions ahead of long weekend holiday.

Technicals showed Malaysian palm oil will retest a resistance at 2,960 ringgit per tonne as a rebound from the Sept. 11 low of 2,874 ringgit has not completed, said Reuters market analyst Wang Tao. 

The widening discount between edible soyoil and palm oil has helped shift demand to the cheaper tropical oil, but investors remain cautious due to rising inventory levels in the No.2 producer.

"Everybody knows that stock is still plentiful and I won't be surprised if September stocks go higher. That's why market is a bit depressed although the spread between bean oil and palm oil is more than $300 per tonne," the trader said.

Brent crude rose for the seventh straight session on Friday, climbing towards $118 a barrel on hopes for stronger global demand for oil and expectations that the spillover effects will reach the commodity markets. 

In other vegetable oil markets, U.S. soyoil for December delivery climbed nearly 1 percent, buoyed by the U.S. Federal Reserve's announcement which investors hope will improve the demand outlook for raw materials.

The most active January 2013 soyoil contract on the Dalian Commodity Exchange climbed 1.2 percent.

REGIONAL EQUITY- BANGKOK, Sept 17 (Reuters) - Most Southeast Asian stocks ended slightly higher on Monday, paring earlier gains, but demand for commodities stocks such as Indonesia's Bumi Resources and Thailand's PTTEP continued as a new round of U.S. monetary stimulus bolstered cyclical stocks.

Market investors appeared cautious on the outlook for the global economy and the euro zone crisis, traders said, prompting players to cash in on large-caps which rallied in the previous session following the U.S. economic stimulus news.

Thailand's benchmark SET index edged up 0.19 percent at 1,278.54, the highest close since June 1996, led by a 4.6 percent jump in energy explorer PTT Exploration and Production Pcl.

In Jakarta, the late reversal sent the main index down 0.04 percent, with finance index off 0.08 percent. But coal miners outperformed, including Bumi Resources, which was up 2.4 percent.

Singapore's Straits Times Index ended up 0.3 percent at a one-month closing high of 3,078.72. Palm oil producer Wilmar International Ltd gained 1.5 percent but DBS Group Holdings fell 0.6 percent after Friday's 0.7 percent gain.