DJI - NEW YORK, Dec 18 (Reuters) - Global stocks advanced to their highest levels since September on Tuesday on signs of compromise in U.S. talks to stop automatic tax hikes and spending cuts that could hurt the economy next year.
With confidence rising that lawmakers would avert the "fiscal cliff," investors shifted funds to stocks and the euro and pulled away from assets traditionally viewed as safe harbors like bonds, gold and the U.S. dollar. The euro hit a 7-1/2 month high against the greenback while gold fell almost 2 percent to its lowest since August.
Wall Street rallied on strong volume, capping off the S&P 500's best two-day run in a month, on confidence that a deal would be struck in Washington to avoid painful spending cuts and tax hikes.
Banking, energy and technology - sectors that would benefit during economic expansion - led gains as investors were confident that lawmakers will come to an agreement to avoid the end-of-year deadline.
"The view is that the economy is getting better, and that is always good for energy demand," said Shawn Hackett, president at Hackett Financial Advisors in Boynton Beach, Florida.
Hackett said the United States would avoid "whatever the 'cliff' means" for the economy, allowing investors to focus on growth.
President Barack Obama's most recent offer to Republicans in the ongoing budget talks makes concessions on taxes and social programs spending. House Speaker John Boehner said the offer is "not there yet," though he remains hopeful about an agreement. Senate Democrats, however, have expressed concern about cuts to Social Security.
The Dow Jones industrial average closed up 115.57 points, or 0.87 percent, at 13,350.96. The Standard & Poor's 500 Index was up 16.43 points, or 1.15 percent, at 1,446.79. The Nasdaq Composite Index was up 43.93 points, or 1.46 percent, at 3,054.53.
NYMEX - TOKYO, Dec 18 (Reuters) - U.S. crude futures rose for a third day on Tuesday on hopes that Washington could be edging closer to a deal to avert the so-called fiscal cliff, which threatens to push the world's biggest oil user into recession and dent energy demand.
* Private exporters reported the cancellation of 300,000 tonnes of U.S. soybeans sold to China and a further 120,000 tonnes sold to unknown destinations. At the same time, exporters reported sales of 110,000 tonnes of U.S. soybeans to unknown destination.
· Oilseeds analyst Oil World said it cut its forecast of the 2013 soybean harvest in Argentina by 1 million tonnes because of unfavorable weather disrupting sowings, but has retained its previous forecast of Brazil's crop.
· Two major winter storm systems are set to sweep through much of the central United States over the next two weeksleaving welcome soil moisture and providing some relief from theworst drought in over 50 years, an agricultural meteorologist said on Tuesday.
· Soybean spot basis bids were mostly steady at processors, elevators and ethanol plants around the U.S. Midwest on Tuesday, supported by lower futures and light county offerings, cash dealers said.
· Key support for the January contract is at its 200-day moving average of $14.72-3/4 and key resistance is at its 50-day moving average of $14.85-1/4. The nine-day relative strength index is at 48.
FCPO - SINGAPORE, Dec 18 (Reuters) - Malaysian palm oil futures edged lower in rangebound trading on Tuesday, hurt by a slowdown in exports at a time when inventory levels remain at record highs.
Cargo surveyors reported a slight drop in Malaysian palm oil exports for Dec. 1-15 from a month ago, leaving traders to hope for slowing production to bring down stock levels that hit 2.56 million tonnes in November.
Palm oil futures have shed more than a quarter of their value since the start of the year, set for their biggest annual drop since 2008, although analysts say prices should recover in 2013 as stocks begin to ease.
"For next year, we see a rebound in crude palm oil prices back to 2,750 ringgit per tonne from the current weak position, with signs only expected to start kicking in when inventories are back to optimal levels," Malaysia's Public Investment Bank said in a research note.
"Although production levels are back to normal, demand from the major consuming countries remains uncertain due to the slowdown in economic activity and tightening measures on imports of vegetable oils."
China, the world's second largest edible oil buyer, will impose stricter quality measures on edible oil imports from Jan. 1 onwards.
The benchmark March contract on the Bursa Malaysia Derivatives Exchange dropped 0.4 percent to close at 2,341 ringgit ($766) per tonne. Prices traded in a tight range between 2,332 and 2,355 ringgit.
Total traded volumes stood at 30,911 lots of 25 tonnes each, higher than the usual 25,000 lots.
Traders are hoping for Malaysia's crude palm oil export tax, set at zero percent for January, to spur shipments of the grade and bring down record stocks.
In a bullish sign for palm oil, Brent crude rose above $108 a barrel on Tuesday as the outlook for demand improved on signs of progress in U.S. talks to resolve a budget crisis that threatens to dip the world's top oil consumer into recession again.
In other vegetable oil markets, U.S. soyoil for January delivery was almost flat in late Asian trade. The most active May 2013 soybean oil contract on the Dalian Commodity Exchange edged up 0.1 percent.
Regional Equties - BANGKOK, Dec 18 (Reuters) - Malaysian shares climbed to seven-week highs on Tuesday with telecoms stocks such as Axiata Group Bhd led a broad rally while Philippine stocks reversed early loss as investors bought laggard large caps such as SM Investments Corp
Malaysian index finished up 0.7 percent after two sessions of losses, led by a 3.4 percent gain in Axiata Group and a 1.4 percent rise in DiGi.Com considered by market players as oversold due to their high valuations.
Philippine index closed up 0.23 percent, ending four straight sessions of falls but below last week's record finish of 5,831.50.
Concerns over potential intervention to stem strength in regional currencies kept market investors cautious across the board, brokers said.
Thai benchmark SET index was up 0.3 percent at 1,362.94, a new closing high in almost 17 years. Singapore's Straits Times Index ended 0.06 percent lower after scaling a 16-month closing high of 3158.70 on Monday.
