DJI- NEW YORK, June 8 (Reuters) - U.S. equities ended on Friday on a high note, with the benchmark S&P 500 index registering its best week of the year as investors returned to stocks on expectations Spain was closer to getting aid for its troubled banks.
Oil prices fell as diminished hopes for more stimulus from central banks fueled concerns about demand.
The euro slid against the dollar, weighed by a three-notch downgrade to Spain's credit rating and signs of economic weakness in Italy and Germany, though it posted its first weekly gain in six weeks.
Senior EU and German officials told Reuters that deputy finance ministers of the 17-nation single currency area would hold a conference call on Saturday morning to discuss Spain's request for an aid package for its ailing banks, although no figure had been set. [ID:nL5E8H83EF]
On Wall Street, the S&P 500 ended its best week in 2012. The strong gains came after the benchmark index fell more than 6 percent in May and dropped just below its 200-day moving average, signaling a technical bounce for equities.
"What's driving the market here," said Robbert Van Batenburg, head of equity research at Louis Capital in New York, "is the belief we're in the final innings of approaching some form of a solution to contain the Spanish problem. I don't buy it, but maybe there's this understanding out there."
The Dow Jones industrial average <.DJI> ended up 93.24 points, or 0.75 percent, at 12,554.20. The Standard & Poor's 500 Index <.SPX> was up 10.67 points, or 0.81 percent, at 1,325.66. The Nasdaq Composite Index <.IXIC> was up 27.40 points, or 0.97 percent, at 2,858.42.
Losses in world shares followed a three-day rally built on expectations of global coordinated efforts to bolster slackening economic growth. But investors were disappointed after neither the European Central Bank nor the U.S. Federal Reserve signaled near-term action.
U.S. President Barack Obama said on Friday that European leaders face an "urgent need to act" to resolve the region's financial crisis as the threat of a renewed recession there spells dangers for an anemic U.S. recovery five months before elections.
NYMEX-NEW YORK, June 8 (Reuters) - U.S. crude futures fell for a second day in a row on Friday as Spain's banking troubles, broader European economic problems and fading hopes about more U.S. Federal Reserve monetary stimulus darkened the outlook for global oil demand.
For the week, however, U.S. crude rose more than 1 percent, snapping five straight weeks of losses, helped by late surge in pre-weekend short-covering, traders said.
Rating agency Fitch downgraded Spain's credit rating and said further downgrades could come as the country struggles to restructure its troubled banking system. [ID:nL1E8H79DE]
Spain is expected to ask the euro zone for help in recapitalizing its banks this weekend, sources in Brussels and Berlin told Reuters. [ID:nL5E8H898X]
In Italy, industrial output fell in April and in Germany imports tumbled at the fastest rate in two years while exports dropped more than expected -- another sign that Europe's largest economy is beginning to feel the chill from the euro zone debt crisis. [ID:nR1E8GN00M] [ID:nL5E8H80N1]
Meanwhile, hopes for a further round of U.S. Fed monetary stimulus were fading fast, a day after Fed Chairman Ben Bernanke offered few hints in a congressional testimony that the central bank would consider doing that as had been speculated in recent days.
* On the New York Mercantile Exchange, July crude settled down 72 cents, or 0.85 percent, at $84.10 a barrel. For the week, it rose 87 cents, or 1.05 percent, snapping five straight weeks of losses.
* The U.S. trade deficit narrowed 4.9 percent in April as slower growth in Europe and China bit into exports and the soft U.S. economy clipped import demand, a Commerce Department report showed. [ID: nnL1E8H83G]
* Hedge funds and other big investors increased their net long positions of NYMEX crude futures and options by 1,582 contracts to 140,750 in the week to June 5, the Commodity Futures Trading Commission said in a weekly report.[ID:nEMS1CU25N]
* U.S. oil production rose to more than 6 million barrels per day for the first time in 14 years in the first quarter of 2012, lifted by the oil boom in North Dakota and Texas, the Energy Information Administration said. [ID:nL1E8H8DND]
* The global oil market is well supplied and can cope with the loss of Iranian crude to Western sanctions, oil officials and executives, including the heads of Total and Royal Dutch Shell said.
CBOT SOYBEAN- CBOT soybean futures were slightly lower at the close of pit trading at 1:15 p.m. CDT (1815 GMT) on Friday as the market set back from a three-day rally, traders said.
* A firm dollar and weakness in the crude oil market weighed on soybeans.
* For the week, CBOT soybeans were up 6.2 percent, the biggest weekly gain in percentage terms for the front-month contract since mid-October.
* The weekly gain snaps a streak of two straight down weeks.
* CBOT July soybeans briefly fell below the 50-day moving average during the session before finding support near that level.
* Private exporters reported the sale of 530,000 tonnes of U.S. soybeans to China and Egypt, U.S. Agriculture Department said on Friday. [ID:nL1E8H826Q]
* High temperatures to stress developing soybean crop around U.S. Midwest this weekend. Some light showers in the forecast for Sunday through Tuesday but rain will provide little relief to parched soils. [ID:nL1E8H83FH]
* Crop forecaster Lanworth pegged U.S. soybean production at 3.019 billion bushels, below the USDA's forecast of 3.205 billion, trade sources said. [ID:nL1E8H89E4]
FCPO- SINGAPORE, June 8 (Reuters) - Malaysian palm oil futures ended almost flat on Friday, as a firm demand outlook for the edible oil was offset by fears of slowing global growth that could crimp commodity demand.
Federal Reserve Chairman Ben Bernanke's testimony to a congressional committee offered little clue on any monetary stimulus policy, overshadowing initial positive market reaction to a Chinese interest cut. [ID:nL3E8H72AO]
Palm oil had a volatile trading week on macroeconomic concerns triggered by the ongoing European debt crisis, and ended the week down 1.1 percent.
"Market sentiment is still uncertain, and the palm market is tracking external factors, such as what happened in Europe and China," said a trader with a foreign commodities brokerage in Malaysia.
"Although there was a rate cut in China, Bernanke's testimony didn't mention QE3, and that has created a lot of uncertainty," he added, referring to market expectations for a third round of quantitative easing.
Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost one ringgit to close at 2,973 ringgit ($934) per tonne. Prices touched a low of 2,925 ringgit on Monday, their lowest since Nov. 2, 2011.
Traded volumes stood at 31,567 lots of 25 tonnes each, higher than the usual 25,000 lots.
On the technicals front, palm oil will be neutral in a range of 2,925-3,038 ringgit per tonne, said Reuters market analyst Wang Tao. [ID:nL4E8H829U]
Palm oil prices are expected to be supported by healthy demand for the tropical oil as Muslims prepare to observe a month of fasting starting in mid-July.
Traders will be looking for clues to demand trends as cargo surveyors release June 1-10 export data on Monday. [PALM/ITS][PALM/SGS]
Market players were also betting on lower palm oil stocks, which probably fell to a 13-month low in May, as overseas demand and domestic consumption outweighed production, a Reuters survey showed on Wednesday. [ID:nL3E8H55J1]
Industry regulator the Malaysian Palm Oil Board (MPOB) will issue official stocks and output data, also on Monday.
The market has shifted its focus to external macroeconomic uncertainty that could hurt palm oil demand. The tropical oil may fall to 2,450 ringgit per tonne, said leading analyst James Fry on Friday. [ID:nL4E8H86YU]
Palm oil could fall to 2,700-2,800 ringgit with the euro debt crisis clouding economic outlook and crimping commodity demand, top oils analyst Dorab Mistry said. [ID:nL3E8H64AG]
REGIONAL EQUITY-BANGKOK, June 8 (Reuters) - Most Southeast Asian bourses edged lower on Friday, led by Singapore with commodity-related firms showing steady declines across markets on expectations of weak global demand.
Singapore's Straits Times Index <.FTSTI> ended down 0.77 percent at 2,737.89, down 0.28 percent on the week. The Philippines Stock exchange ended down 0.57 percent to 4,994.07.
Stocks in Malaysia <.KLSE> were also weaker, sliding 0.3 percent to 1,570.62, with a weekly loss of 0.19 percent.
Indonesia <.JKSE> eased 0.4 percent to 3,825.33, down 0.7 percent on the week, after its fourth-straight weekly loss.
Vietnamese stocks <.VNI> fell 0.4 percent, reversing Thursday's gain following the S&P upgrade of its credit outlook.
Bucking the trend, Thai SET index <.SETI> rose 0.8 percent on Friday amid late bargain hunting, dealers said.
