DJI- NEW YORK, May 14 (Reuters) - U.S. stocks fell on Monday as investors dealt with the one-two punch of worsening political upheaval in the euro zone and the possibility that China's economy may be softening more than previously thought.
The S&P 500 finished lower for the fourth day of five to close at its lowest level since February, adding fuel to worries of a coming market correction.
Economically sensitive shares, including banks and energy companies, paced the decline. Exxon Mobil Corp lost 1.2 percent to $82.12. The NYSEArca oil index <.XOI> fell 1.8 percent.
State television in Greece reported the president of the fiscally beleaguered country will continue talks on forming a coalition government, although Socialist leader Evangelos Venizelos said on Monday he was not optimistic that a government could be formed.[ID:nL5E8GD2Z1][ID:nA8E8GD00C][ID:nA8E8E902Q]
"People are starting to lose patience - you saw what happened in Greece and some of the other regions around Europe, in terms of voters getting frustrated," said Ken Polcari, managing director at ICAP Equities in New York.
Banks were pressured by JPMorgan Chase & Co , which announced the exit of a top executive after suffering trading losses that could reach $3 billion or more. JPMorgan shares fell 3.2 percent to $35.79 after losing 9 percent on Friday. The KBW Bank Index <.BKX> dropped 2.6 percent. [ID:nL5E8GECMU]
Adding to the swirling political winds in Europe, German Chancellor Angela Merkel's Christian Democrats suffered a crushing defeat on Sunday, which could encourage the opposition to increase attacks on her austerity policies. Merkel said on Monday the defeat was a bitter setback, but would not alter her view on how to achieve growth. [ID:nL5E8GD1JG] [ID:nL5E8GE862]
Concerns about the depth of a slowdown in China have been troubling investors for several months. China's decision on Saturday to cut the amount of cash banks must hold as reserves, normally seen as a pro-growth move, suggested the country may be facing more significant hurdles. [ID:nL4E8GC03Q]
The three major U.S. stock indexes pared losses after the European markets closed before selling reaccelerated near the end of trading, pushing the S&P 500 below an important support level at 1,340, which could trigger further selling.
The Dow Jones industrial average <.DJI> dropped 125.25 points, or 0.98 percent, to close at 12,695.35. The Standard & Poor's 500 Index <.SPX> lost 15.04 points, or 1.11 percent, to 1,338.35. The Nasdaq Composite Index <.IXIC> fell 31.24 points, or 1.06 percent, to 2,902.58.
Safe-haven currencies, including the dollar and the Japanese yen, rose, with the euro hitting a four-month low against the dollar. Oil fell sharply, with Brent crude falling to its lowest level in 3-1/2 months. [O/R]
NYMEX- NEW YORK, May 14 (Reuters) - U.S. crude futures slumped to a five-month low on Monday as Greece's inability to form a new government raised fears it might exit the euro zone and worries about China's economic slowdown persisted, sparking a broad commodities sell-off.
Concerns about the euro zone economy were unabated as data showed that factory output in the region fell in March, adding to recent disappointing reports indicating the bloc's recession may not be as mild as analysts had thought. [ID:nL5E8GE5OT] [ID:nL5E8GEFRW]
In China, its central bank reduced bank reserve requirements in a bid to increase lending funds and forestall a deeper slide in the world's second largest economy. The move came after dismal industrial production data released on Friday.[ID:nL4E8GC03Q]
Oil prices have found a long-term floor at $90-$95 per barrel and nearby spot oil prices could rise sharply if Middle East tensions increase again, the co-heads of trading company Mercuria said. [ID:nL5E8GEG5J]
Meanwhile, U.S. crude stockpiles were forecast to have risen 1.5 million barrels in the week to May 11, according to a preliminary Reuters poll ahead of weekly inventory data. [EIA/S]
* On the New York Mercantile Exchange, June crude closed $1.35 lower, or 1.4 percent, at $94.78 a barrel, the lowest since Dec. 19, when front-month crude settled at $93.88. It posted an intraday low of $93.65, also the lowest for front-month crude since Dec. 19. .
* U.S. oil refiners are expected to shut 821,000 bpd of capacity in the week ending May 18, down from 1.12 million bpd last week, data from research company IIR Energy showed. [ID:nL5E8GE5XD]
* Turkey has reduced its crude oil imports from Iran steeply in April from unusually high levels in March but its purchases were still close to last year's average, indicating that Ankara has yet to slash buying to the extent sought by Washington, data from shipping sources showed. [ID:nL5E8GE93D]
CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell to a six-week low as a firmer dollar and worries about the global economy prompted long liquidation, traders said.
* Optimism about U.S. planting progress and expectations that U.S. farmers will plant more soybeans than USDA forecast in its March 30 report pressured new-crop contracts, sending November soy to a two-month low below $13 a bushel.
* Analysts polled by Reuters expected USDA to show U.S. soybean planting progress at 43 percent in its weekly crop progress report later on Monday. [ID:nC3E8FP00C]
* Worries about a potential Greek exit from the euro drove a rush to safety by investors, pressuring riskier assets including grains. Worries about the China's decision to loosen monetary policy at the weekend added to fears that the global economy is suffering. [MKTS/GLOB]
* Large speculators hold a sizeable net long in CBOT soybeans, leaving the market vulnerable to long liquidation. But funds scaled back in the latest reporting week from a record-large net long a week earlier, CFTC data showed on Friday.[ID:nL1E8SB793]
* The National Oilseed Processors Association reported the U.S. soybean crush for April at 131.708 million bushels, below the average trade estimate of 134.8 million and down from 140.534 million in March. [ID:nWNA7149]
* NOPA reported April U.S. soyoil stocks at 2.385 billion lbs, above an average of trade estimates for 2.362 billion.
* China, the world's top soy buyer, is likely to import 5.63 million tonnes of the oilseed in May, the commerce ministry estimated, up 15 percent from actual arrivals of 4.88 million tonnes in April. [ID:nL4E8GE5LB]
* CBOT May contracts expired quietly at 12:01 p.m. CDT (1701 GMT).
* ICE U.S. soybean futures <0#ISF:> debuted on Monday but volume was light, with only about 485 contracts traded by the CBOT close. The cash-settled ICE grain contracts trade nearly around the clock, weekdays from 7 p.m. to 5 p.m. CDT (0000 to 2200 GMT). [ID:nL1E8GD2AI]
FCPO- SINGAPORE, May 14 (Reuters) - Malaysian palm oil futures suffered their sharpest fall in more than a year on Monday, closing at a three-month low as failed talks to form a new Greek government heightened fears about the euro zone's debt crisis.
Market sentiment was bearish as talks to form a coalition government in Greece stalled, pushing the debt-laden country closer to bankruptcy and a possible exit from the euro zone. [ID:nL5E8GD0FH]
"Political uncertainty in euro zone and a gloomy global economic outlook weighed on the market. Weakness in Malaysian palm overnight is also a factor," said a trader with a local commodities brokerage in Malaysia, referring to palm oil futures that slipped to a 9-week low on Friday.
Benchmark July palm oil futures on the Bursa Malaysia Derivatives Exchange lost 3.8 percent to close at 3,150 ringgit ($1,023) per tonne, the worst single-day loss since February last year, when prices dropped more than 4 percent.
Palm oil closed at its weakest since ending at 3,168 ringgit on Feb. 13 this year.
"Some emotional loss-cutting and headline-driven sell down were going on. Fundamentals are actually not so bad ... the sell down was grossly overdone and a rebound is expected soon," said another dealer with a foreign commodities brokerage in Malaysia.
Traded volumes stood at 40,345 lots of 25 tonnes each, much higher than the usual 25,000 lots as traders were eager to cut losses.
Palm oil seems to be heading towards 3,136 ringgit as it has broken a support level at 3,208 ringgit per tonne, said Reuters market analyst Wang Tao based on technical analysis. [ID:nL4E8GE386]
Traders will be looking out for export numbers for the first half of the month due on Tuesday to gauge demand trend for the edible oil.
Market players expected a recovery in export numbers after the fall in the first 10 days but said that it may not lift palm oil prices by much in a volatile global market.
Malaysia's April palm oil stock level fell 5.4 percent to 1.85 million tonnes from a month ago, according to industry regulator Malaysian Palm Oil Board. [ID:nL4E8GA2VA]
"Earlier positive news of lower soybean production from South America has already been priced in, so the Dalian market is now tracking CBOT (U.S. Chicago Board of Trade). If prices continue to fall for the next two days, we will soon see a rebound," said Huang Zhi Qiang, an analyst with Guotai Junan Futures in Shanghai.
REGIONAL EQUITY- BANGKOK, May 14 (Reuters) - Southeast Asian stocks fell on Monday, with Thailand's main index posting its biggest daily loss in seven months, as uncertainty over the impact of a potential Greek exit from the euro drove a rush to safety by investors, with a rout in oil markets prompting selling in energy related shares.
Underperforming the region, the Thai SET index <.SETI> slid 2.1 percent to finish at 1,165.51, its lowest close since April 17. Index heavyweight energy shares <.SETEN> dropped 2.4 percent.
Vietnamese <.VNI> stocks fell for a fourth consecutive session, ending down 2.17 percent at 469.69, their lowest close in almost two weeks.
