DJI- NEW YORK, Sept 4 (Reuters) - The S&P 500 closed slightly lower on Tuesday as investors continued to await clarity on European Central Bank plans to shore up heavily indebted countries, but the market ended off its lows on a rally in Apple Inc AAPL.O.
Equities were lower for much of the session, with industrial and material shares weak after a report showing manufacturing contracted by its fastest pace in more than three years in August.
FedEx Corp FDX.N, the world's second-largest package delivery company, cut its fiscal first-quarter forecast after the market's close, saying the global economy is weaker than thought and harming sales. The company is seen as a window on the economy because of the wide range of industries it serves. The shares fell 4 percent in extended trade.
Markets remain skittish ahead of the ECB's meeting on Thursday, where ECB President Mario Draghi is expected to unveil plans to lower borrowing costs for countries such as heavily indebted Spain and Italy.
"We're not going to get any definitive direction so long as everyone is waiting around on the Fed and ECB," said Michael Vogelzang, who helps oversee $2.2 billion as president at Boston Advisors. "Things seem very soft right now, and until that changes the market may have a hard time getting out of the range we've been in."
On Friday, Federal Reserve Chairman Ben Bernanke disappointed investors by declining to signal any imminent stimulative action to boost sluggish U.S. growth, though he kept the door open for further easing in the future.
While investors have been disappointed by past euro zone efforts to solve the debt crisis, some are positioning optimistically. Bill Gross, co-founder of asset-management giant PIMCO, tweeted that Draghi appeared willing to write two- to three-year checks to peripheral nations and recommended investors buy gold and Treasury Inflation Protected Securities.
Apple, which as the largest U.S. company has an outsized impact on indexes, rose 1.5 percent to $674.97 and helped erode broader losses. The tech giant distributed invitations to an event in San Francisco on Sept. 12, setting the stage for what is widely expected to be the release of the iPhone 5. (Full Story)
The Dow Jones industrial average .DJI ended down 54.90 points, or 0.42 percent, at 13,035.94. The Standard & Poor's 500 Index .SPX was down 1.64 points, or 0.12 percent, at 1,404.94. The Nasdaq Composite Index .IXIC was up 8.09 points, or 0.26 percent, at 3,075.06.
U.S. manufacturing contracted for a third straight month in August while firms in the sector hired the fewest workers since late 2009, according to an Institute for Supply Management survey. The data followed similar disappointing readings on manufacturing elsewhere in the world.
The Morgan Stanley cyclical index .CYC fell 0.9 percent. The S&P materials sector index .GSPM lost 1.5 percent while industrial stocks .GSPI fell 0.9 percent. Both were off the lows of their sessions. Cliffs Natural Resources Inc CLF.N fell 6 percent to $33.68 and U.S. Steel Corp X.N lost 3.4 percent to $18.78.
Separate data showed U.S. construction spending in July fell by the most in a year as both the private and public sectors cut back on investment, according to a report that could dampen hopes of a pick-up in economic activity in the third quarter. (Full Story) (Full Story)
The all-important payrolls report due Friday will also be closely watched. The employment report will be the final major economic report before the Federal Open Market Committee meets on Sept. 12-13.
Equities had risen lately on hopes the Fed will launch a third round of stimulus to boost the economy and that the ECB will soon start buying bonds of troubled euro zone economies to contain the debt crisis.
In company news, Valeant Pharmaceuticals International Inc VRX.TO VRX.N agreed to buy Medicis Pharmaceutical Corp MRX.N for $2.6 billion in cash. Valeant shares climbed 15 percent to $58.78 on the New York Stock Exchange while Medicis surged 38 percent to $43.65. (Full Story)
About 57 percent of companies traded on the New York Stock Exchange closed higher, while almost three-fifths of Nasdaq-listed shares ended in positive territory.
Volume was light, with about 5.53 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 7.84 billion. Volume tends to be anemic during the summer but it has been especially low lately as investors await clarity on central bank action and many market participants were out for the Labor Day holiday.
NYMEX- NEW YORK, Sept 4 (Reuters) - U.S. crude futures fell on Tuesday as weak manufacturing and construction spending data added to concerns about slowing economic growth and resulting curbs on demand for petroleum, countered hopes for more monetary stimulus from central banks.
CBOT- Soybean futures on the Chicago Board of Trade set a fresh all-time high approaching $18 a bushel on worries about tight U.S. supplies and unrelenting demand, traders said.
FCPO- KUALA LUMPUR, Sept 4 (Reuters) - Malaysia palm oil futures closed lower on Tuesday after rising to their highest level in a week, as traders booked profits from a rally triggered by record high soybean prices.
* Front-month soybeans Sc1 hit a record high price of $17.94-3/4 per bushel while most-active November SX2 set a contract high at $17.89.
• Spot soymeal SMc1 set a record high at $554.40 a ton and spot soyoil BOc1 set a one-year top at 57.78 cents per lb.
• But the market pared gains by the close on fund-driven profit-taking, especially in nearby soybeans and soymeal.
• Bear-spreading noted, with deferred contracts gaining more than the front months, due in part to weakening cash soy values in the interior Midwest as well as the U.S. Gulf.
• Allendale Inc producer survey puts the U.S. soybean crop at 2.602 billion bushels, down 3.3 percent from USDA's latest forecast. The survey of farmers in 32 states forecast a soy yield of 34.9 bushels per acre.
• Signs are intensifying that livestock farmers are cutting production as the surge in soybean and corn prices to record levels this summer raises animal feed costs - analysts Oil World.
• Record soybean prices will cause a major swing in demand towards cheaper palm oil in coming months which in turn will push palm prices up - analysts Oil World.
• USDA reported export inspections of U.S. soybeans in the latest week at 15.126 million bushels, just above trade expectations for 10 million to 15 million bushels.
Prices also fell after traders priced in a rise in stocks in Malaysia due to higher production, although strong palm oil exports could help reduce inventories.
"I think palm oil is rising on the back of soybeans and that's the main reason of the strength in palm oil," said a trader with a foreign commodities brokerage in Malaysia.
"The unexpectedly high palm oil exports in August also provided some friendly sentiment. Previously we were expecting stocks at 2.3 million tonnes, now everybody has cut back stocks by 200,000-250,000 tonnes based on exports alone."
The benchmark November 2012 contract FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 0.5 percent to close at 3,058 ringgit ($985) per tonne after touching 3,100 ringgit, a level last seen on Aug. 27.
Total traded volume stood at 42,611 lots, much higher than the usual 25,000 lots.
U.S. soybean futures climbed to a record high on Tuesday as falling exports from Brazil highlighted the decline in global supplies after poor production in South America and a historic drought in the United States. GRA/
Higher soybean and soybean oil prices mean consumers are likely to turn to substitutes such as palm oil.
Technicals remain bearish as palm oil faces a resistance at 3,093 ringgit per tonne, and will retrace to 3,049 ringgit, said Reuters analyst Wang Tao.
But demand is likely to remain firm: Malaysia's palm oil exports surged 17.7 percent in August from a month ago, according to cargo surveyor Intertek Testing Services. PALM/ITS
Another cargo surveyor Societe Generale de Surveillance reported a steeper 19.6 percent increase for the same period, thanks to higher shipments of crude products and a demand recovery from major food buyers China and India. PALM/SGS
The El Nino weather conditions will likely be weak and short-lived, New Zealand scientists said on Tuesday, providing some relief to plantation owners in Southeast Asia.
Oil prices rose for a fourth day to around $116 per barrel, supported by hopes for further stimulus measures from central banks in the United States and Europe, and a slow restart in the Gulf of Mexico after Hurricane Isaac. O/R
The tight global supply of soybeans also pushed other vegetable oil markets higher.
By 1004 GMT, the most active U.S. soyoil contract for December delivery BOZ2 was 1.6 percent higher after touching the highest level since September 2011.
The most active January 2013 soyoil contract DBYF3 on the Dalian Commodity Exchange closed 1 percent higher after touching a fresh contract high.
REGIONAL EQUITY- BANGKOK, Sept 4 (Reuters) - Southeast Asian stock markets ended mostly flat-to-weaker on Tuesday amid rising risk aversion over the global economic outlook, with losses in large caps such as Philippine Long Distance Telephone Co TEL.PS leading the Manila bourse lower.
Sharemarket investors waited to see what the European Central Bank and the U.S. Federal Reserve would do to tackle slowing global growth.
Bucking the trend, the Ho Chi Minh Stock Exchange's VN Index .VNI rose 1.5 percent to the highest close in almost two weeks. Vietnam resumed trading after a market holiday on Monday.
