DJI- NEW YORK, May 22 (Reuters) - U.S. equities faltered minutes before the close on Tuesday and the euro fell as hopes European leaders will tackle the region's debt crisis ebbed, fanning doubts that much would come of a meeting just a day away.
European shares earlier gained almost 2 percent on optimism European leaders may devise new measures to foster growth in the euro zone and restore a doubtful market's confidence.
An informal summit of European Union leaders late on Wednesday is expected to discuss the idea of regional bonds jointly underwritten by all euro zone member states. [ID:nL5E8GL8MO]
However, Germany's long-standing opposition is unlikely to change; the country has dismissed the French-led call for the euro zone to issue common bonds. [ID:nL5E8GM4K6]
U.S. stocks ended the day mostly flat after gains of about 1 percent, pulled lower by a news report that some traders took as a sign that the risk of Greece crashing out of the euro zone was growing.
Dow Jones quoted former Prime Minister Lucas Papademos of Greece as saying that Greeks had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone, a risk he said was unlikely to materialize but was real.
The report weighed on a dose of pessimism in the market.
"The string of summit meetings that have been called to address the euro crisis thus far have more often than not failed to live up to market hopes for quick and decisive action and this one will be no exception," said Shaun Osborne, chief currency strategist at TD Securities in Toronto.
The Dow Jones industrial average <.DJI> closed down 1.67 points, or 0.01 percent, at 12,502.81. The Standard & Poor's 500 Index <.SPX> rose 0.64 points, or 0.05 percent, at 1,316.63. The Nasdaq Composite Index <.IXIC> fell 8.13 points, or 0.29 percent, at 2,839.08.
Banking shares led the rally, with JPMorgan Chase & Co , Citigroup Inc , Bank of America and Wells Fargo Corp , the top four contributors to the S&P 500's gains. The KBW banking index <.BKX> rose 1.1 percent.
Another 8.9 percent downdraft in Facebook Inc pressured tech shares. Shares are now 18.4 percent off their initial public offering price after three days of trading.
The euro fell amid skepticism Wednesday's talks would yield much progress. The euro was down 1.0 percent against the dollar at $1.2681. The dollar index rose 0.7 percent to 81.679 <.DXY>, rising after three days of losses.
The dollar was boosted in part by a fall in the yen after Fitch ratings agency downgraded Japan on worries about its high level of public debt. [ID:nL4E8GM0XU]
"Tomorrow's meeting will not deliver any landmark solution. The market is likely to be more prone to disappointment," said Matteo Regesta, a strategist at BNP Paribas.
"There's this delusion of a quick fix either via monetary policy with the European Central Bank or via some kind of fiscal decision, but unfortunately this won't happen," Regesta said.
NYMEX-NEW YORK, May 22 (Reuters) - U.S. crude oil futures fell on Tuesday, as a potential deal between Iran and the U.N. nuclear watchdog eased worries about crude supplies, and after the OECD
warned the euro zone crisis threatened to derail the fragile global economic recovery.
NYMEX crude for June delivery expired and settled almost 1 percent lower, down for the seventh time in eight sessions.
In post-settlement trading, prices were little changed after the American Petroleum Institute reported that domestic crude stocks rose 1.5 million barrels in the week to May 18, just above the Reuters forecast for a 1.0-million-barrel rise.[API/S]
The increase included a 491,000-barrel gain in stocks at the Cushing, Oklahoma, delivery hub for U.S.-traded oil futures.
Stocks at the hub could dip by next week's report following the reversal of the Seaway pipeline flow, aimed at easing the Midwest oil glut. The pipeline began pumping crude from the hub to the main U.S. refining center in Houston on Saturday, outside of last week's inventory reporting period. [ID:nL1E8GJ2AE]
* On the New York Mercantile Exchange, crude for June delivery expired and settled at $91.66 a barrel, down 91 cents, or 0.98 percent, after trading between $91.39 to $93.01.
* NYMEX July crude closed at $91.85, falling $1.01, or 0.98 percent. Its discount against July Brent crude widened to $16.56, from $15.95 on Monday.
* U.S. crude's Relative Strength Index (RSI) fell back to 25.3, from 27.4 on Monday. The index fell below 30, the level indicating oversold conditions, beginning May 11, when it hit 29.799, according to Reuters data.
* Iranian oil exports have not dropped further in May after falling sharply since March, industry sources said on Tuesday, because core customers in Europe and Asia continue to buy ahead of European sanctions aimed at slowing Tehran's nuclear program. [ID:nL5E8GMBNV]
CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell more than 2 percent, hitting a one-week low as funds liquidated long positions on favorable U.S. crop weather and spillover pressure from corn, traders said.
* Softening cash markets for corn and soybeans at the U.S. Gulf added pressure.
* Unconfirmed rumors that China might cancel some purchases of old-crop U.S. corn and soybeans also weighed on prices, along with a firmer dollar.
* Front-month soybeans fell to a one-month low on continuous price charts, while the July soybean contract fell to its lowest level since March 30.
* The U.S. Department of Agriculture said the U.S. soybean crop was 76 percent planted as of Sunday, up from 46 percent the previous week and above trade expectations. The crop was 35 percent emerged, well ahead of the five-year average of 13 percent. [US/SOY]
* Some traders said forecasts for the six- to 15-day period in the U.S. Midwest had turned wetter, easing worries about potential crop stress.
* Argentina's 2012 soybean crop may fall as low as 40 million tonnes, from 49.2 million tonnes in 2011, as drought damage to crops is still becoming apparent, Hamburg-based oilseeds analysts Oil World said. [ID:nL5E8GM73P]
FCPO- SINGAPORE, May 22 (Reuters) - Malaysian palm oil futures edged up on Tuesday, as hopes grew that Europe would take steps to tackle its debt crisis, which has triggered a massive selloff in global financial markets.
France's Francois Hollande will push a proposal for mutualising European debt at an informal summit of EU leaders on Wednesday, sending the markets positive signals and easing some investors' fears. [ID:nL5E8GL8MO]
But optimism was muted as most traders chose to remain on the sidelines until more concrete steps to tackle the crisis emerge.
"The market is still stuck within yesterday's range, it's a continuation of the consolidation phase. No one wants to do anything as market sentiment is still rather mixed," said a dealer with a foreign commodities brokerage in Malaysia.
Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange ended up 0.4 percent higher at 3,110 ringgit ($997) per tonne.
Traded volumes picked up after the midday break with 27,849 lots of 25 tonnes each, slightly more than the usual 25,000 lots.
Palm oil trading looks neutral in a range of 3,019 to 3,136 ringgit per tonne, said Reuters market analyst Wang Tao based on technical analysis. [ID:nL4E8GL1AY]
Fundamentals remain intact as demand for the edible oil looks healthy, reflected by higher Malaysian palm oil exports for May 1-20 from a month ago.
On the supply side, dry weather concerns in the United States that threatened to hurt soybean crop reinforced expectations of tighter global oilseed supply.
REGIONAL EQUITY- BANGKOK, May 22 (Reuters) - Southeast Asian stocks were broadly higher on Tuesday led by Indonesia, rebounding from five straight losses, and Singapore on the back of commodities firms such as palm oil giant Wilmar International Ltd .
Indonesia <.JKSE> climbed 2.1 percent led by financial firms, after a combined 4.76 percent loss in the previous sessions. Singapore <.FTSTI> rose 1.2 percent.
Stocks also advanced on the Malaysian market <.FTSTI>, up by 0.5 percent and in the Philippines <.PSI> which ended 0.09 percent higher.
Vietnamese stocks <.VNI> bucked the regional trend to fall 0.02 percent, reversing Monday's 3 percent climb, while Thai stocks <.SETI> edged down 0.3 percent amid late selling in energy shares.
Investors were looking to an informal summit of the European Union on Wednesday where leaders could agree on measures to boost growth, brokers said.
"Investors are looking forward to the EU summit for possible pro growth measures. Overall, stock market sentiment will still very much depend on external development," said Bangkok-based Pichai Lertsupongkij, head of investment advisory services at broker Thanachart Securities.
