Tuesday, December 18, 2012

Trader's Highlight

DJI- NEW YORK, Dec 17 (Reuters) - The S&P 500 ended at its highest level in almost two months on Monday on rising hopes that negotiations over the "fiscal cliff" were making progress and that a deal could be reached in days.

After weeks of stalemate, President Barack Obama and Republican House Speaker John Boehner met at the White House on Monday, raising hopes that Washington will be able to head off steep tax hikes and spending cuts that threaten the economy.

All of the S&P 500's 10 sectors were higher, led by financials and other growth-oriented sectors. The S&P Financial Index .GSPF gained 2.1 percent, and shares of Bank of America BAC.N jumped 4 percent to $11. In a research note Monday, Meredith Whitney Advisory Group shifted to a positive stance on financials and upgraded Bank of America, Citigroup C.N and Discover Financial DFS.N shares.

The S&P consumer distretionary index .GSPD, up 1.8 percent, was the second-best performing sector. Investors worry the U.S. economy could slide into recession if the tax and spending changes are implemented.

Boehner has edged closer to Obama's position by proposing to extend lower tax rates for everyone who earns less than $1 million. Still, his position remains far from that of President Obama.

"Trumping everything right now are the fiscal cliff talks. It seems like progress is being made. I think it's getting to the nitty gritty," said Alan Lancz, president of Alan B. Lancz & Associates Inc. in Toledo, Ohio. "The bet right now is that something will come by the end of this week."

The Dow Jones industrial average .DJI was up 100.38 points, or 0.76 percent, at 13,235.39. The Standard & Poor's 500 Index .SPX was up 16.78 points, or 1.19 percent, at 1,430.36, its highest close since Oct. 22. The Nasdaq Composite Index .IXIC was up 39.27 points, or 1.32 percent, at 3,010.60.

The gains, which came on lighter-than-usual volume, ended a two-day losing streak on the S&P 500. The index also had its best daily percentage gain since Nov. 23. Volume was roughly 6.2 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of 6.4 billion.

In the financial sector, American International Group Inc. AIG.N shares rose 3 percent to $34.95 on plans to sell as much as $6.5 billion of AIA Group Ltd. Advancing stocks also included those in the home construction sector .DJUSHB, which rose 4.5 percent.

"People are looking for sectors to play, and I think Bank of America broke out of some long-standing price levels, and it got everything going in that sector," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.

 
Apple Inc AAPL.O shares edged up after recent losses, rising 1.8 percent to $518.83 even though two firms cut their price targets on the stock Monday.

The tech giant said it sold more than 2 million of its new iPhone 5 smartphones in China during the three days after its launch there on Friday, but the figures did not ease worries about stiffer competition. Apple shares have tumbled more than 25 percent in about three months.

Compuware Corp CPWR.O rose 12.9 percent to $10.76 after hedge fund Elliott Management offered to buy the business software maker for $2.3 billion and S&P Capital IQ raised the target price and moved it to "hold" from "strong sell."

Advancers outnumbered decliners on the NYSE by about 2 to 1, and on the Nasdaq by nearly 9 to 4.

NYMEX- NEW YORK, Dec 17 (Reuters) - U.S. crude oil futures rose on Monday, lifted by news of the impending expansion of the Seaway crude oil pipeline and optimism about a budget deal avert mandated tax hikes and spending increases, the so-called "fiscal cliff."
 
CBOT- CHICAGO, Dec 17 (Reuters) - U.S. corn futures fell on Monday due to waning demand from ethanol producers and exporters, traders said.

Soybeans, which have provided support to the entire grain complex over the last few weeks, were mixed, with the benchmark January contract SF3 bucking the overall downward trend due to tight supplies.

"Strong U.S. demand continuing into the holidays and into the first quarter of 2013," brokerage INTL FCStone said in a research note to clients. "It is no surprise that the front month is outrunning all the deferreds."

Wheat futures dropped as a wave of technical selling hit the market. The benchmark March contract closed below its 200-day moving average for the first time since June.

Corn prices have fallen for seven of the last eight trading days as supply concerns have eased amid the slowdown in demand. CBOT March corn CH3 settled down 6-3/4 cents at $7.24 a bushel.

"You continue to see slow exports and ethanol profitability remains dismal," said Al Kluis, president of Kluis Commodities.

CBOT January soybeans SF3 were 1/4 cent higher at $14.96-1/4 a bushel while CBOT March soybeans SH3 closed down 3-1/4 cents at $14.88-1/4. The front-month contract hit a 5-1/2 week high early in the session but scaled back its gains as deferred months turned lower.

CBOT March wheat WH3 ended off 6 cents at $8.08 a bushel.

The declines in soybeans were limited by forecasts for low U.S. stockpiles and worries about South American supplies.

Soybeans had gained 1.3 percent on Friday after data from the National Oilseed Processors Association showed U.S. soybean processors crushed 157.308 million bushels in November, the largest for the month since November 2009, and the biggest overall since January 2010.

Processors are crushing at a high rate to meet the strongest demand for U.S. soybean meal since the record year of export sales in the 2009/10 marketing season, industry sources said.

Export demand for soybeans has also been strong, especially from top global soy buyer China, which has forced domestic processors to bid up for soybean supplies.

Widespread rainfall moved across Argentina over the weekend causing another slowdown in crop seedings and the rain is expected to continue through Wednesday, said John Dee, meteorologist for Global Weather Monitoring.

"This rain certainly isn't welcome but they did have 10 to 14 days of drier weather leading up to it so they were able to get some work done," Dee said.

Argentina's soybean harvest has been pegged at 53 million tonnes by the Rosario grains exchange.

"The overly wet weather, in other words, is having a greater impact on expectations in the country itself," Commerzbank said. Prices at 2:34 p.m. CST (2034 GMT)

FCPO- SINGAPORE, Dec 17 (Reuters) - Malaysian palm oil futures inched up on Monday, riding on rival soybean oil's gains after U.S. soy crushing data sent soybeans to a six-week peak.

Chicago soybeans hit their highest since Nov. 8 after data from the National Oilseed Processors Association showed U.S. soybean processors crushed the most soybeans in almost three years and on higher demand especially from top buyer China.

Soybean oil rose in tandem, supporting palm oil, a competing vegetable oil used to make products ranging from food to biofuels.

But gains were limited as concerns over high Malaysian stockpiles remained, especially as the latest data pointed to signs of slowing exports, although traders said easing production could help bring down stock levels.

"The market is up a bit on the back of Dalian and Chicago soybean oil," said a trader with a foreign commodities brokerage in Malaysia. "Malaysian palm production should come down this month, so inventory should probably go down a bit."

At the close, the benchmark March contract FCPOc3 on the Bursa Malaysia Derivatives Exchange had gained 0.3 percent, settling at 2,352 ringgit ($770) per tonne.

Total traded volumes stood at 30,806 lots of 25 tonnes each, much higher than the usual 25,000 lots.

Exports of Malaysian palm oil products for Dec. 1-15 fell 6.4 percent to 719,817 tonnes from 769,087 tonnes for the Nov. 1-15 period, cargo surveyor Intertek Testing Services said on Saturday.
Another cargo surveyor Societe Generale de Surveillance will issue data for the same period later on Monday.

 
Malaysia, the world's No.2 palm oil producer, will set its crude palm oil export tax for January at zero percent, a government circular showed on Monday, in a bid to spur shipments of the grade and bring down record stocks.

In a bearish sign for palm oil, Brent crude edged below $108 a barrel on Monday as investors remained concerned over the progress of U.S. budget deficit reduction talks, countering support from signs of a brighter economic outlook in China.

In other vegetable oil markets, U.S. soyoil for January delivery BOF3 edged up 0.5 percent. The most active May 2013 soybean oil contract DBYcv1 on the Dalian Commodity Exchange closed 1.5 percent higher.

REGIONAL EQUITY- BANGKOK, Dec 17 (Reuters) - Most Southeast Asian stock indexes ended lower to flat in a light session on Monday as U.S. budget uncertainty undermined global market sentiment, with the Philippines sliding to a near three-week low and Singapore retreating from 17-month highs.

The Philippines Composite index .PSI posted a fourth-straight loss, ending down 1.5 percent and further off a record finish of 5,831.50 hit early last week. Singapore's Straits Times Index .FTSTI pared early gains to fall 0.3 percent.

Kuala Lumpur Composite Index .KLSE was 0.2 percent lower, after posting a 2.1 percent gain last week, the region's second best performer. The Malaysian bourse said foreign investors were net sellers worth 13.6 million ringgit ($4.45 million).

After a choppy session, Jakarta's Composite Index .JKSE erased early loss to end up 0.16 percent. Thailand's SET index .SETI ended just 0.04 percent up, topping Friday's near 17-year peak of 1,358.50.

The Bangkok stock market gained some support in the wake of buying from domestic institutions for retirement mutual funds (RMF) and long-term equity funds (LTF) which offer tax breaks and often see high demand towards the end of the year.