Trader's Highlight

DJI - NEW YORK, June 12 (Reuters) - U.S. stocks took their cues from Europe's troubled debt markets on Tuesday, staging a comeback rally to end up more than 1 percent as Spanish bond yields came off euro-era record highs. 

Trading has been choppy this week as investors struggle for clarity over whether the $125 billion bailout for Spanish banks agreed over the weekend will be effective and have turned to bond yields as a thermometer for risk aversion. 

Economically sensitive sectors that had sold off recently were the strongest performers, suggesting investors saw value in beaten down shares, while traders looked for an oversold bounce as the S&P 500 slipped back toward 1,300. 

"We are just being held hostage by all the news flow," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "I don't think anyone has a handle on this." 

"Right now everyone has got a pretty short-term trading mentality," he said. "You have to be ready to abandon your thoughts and change your mind at a moment's notice."    

Economically sensitive shares that rise and fall as fears ebb and flow were the biggest gainers. Materials, financial and industrial shares were up over 1.5 percent. 

Boeing Co led the Dow, climbing 3.5 percent, helped by an upgrade by Sanford C. Bernstein, which said it saw a better outlook for the company's new Dreamliner plane. 

For the week so far, the S&P is close to flat, reflecting the uncertainty in the market. 

For the day the Dow Jones industrial average gained 162.57 points, or 1.31 percent, to 12,573.80. The Standard & Poor's 500 Index rose 15.25 points, or 1.17 percent, to 1,324.18. The Nasdaq Composite Index added 33.34 points,or 1.19 percent, to 2,843.07. 

NYMEX - NEWYORK, June 12 (Reuters) - U.S. crude futures traded little changed in positive territory on Tuesday after industry data showed domestic oil inventories rose last week, against forecasts that they fell. 

Earlier, crude futures settled up for the first time in four sessions, rebounding from an eight-month low as traders geared for the release of weekly industry and government petroleum inventory reports. 

Bargain-hunting helped lift prices, but volume was slightly below the 30-day average as oil markets awaited an OPEC policy meeting on Thursday in Vienna. 

The American Petroleum Institute said that for the week to June 8, domestic crude stocks rose by 1.6 million barrels due to higher imports, against the forecast for a 1.4-million-barrel decline in a Reuters poll of analysts.

Stockpiles at the Cushing, Oklahoma delivery point fell by 344,000 barrels.  

Gasoline stocks fell by 878,000 barrels against the forecast for a 1.1-million-barrel increase while distillate stocks rose by 519,000 barrels, far less than the forecast for a 1.3-million-barrel build.  

Refinery utilization rose 0.7 percentage point, to 88.7 percent of capacity. The forecast was for a decline by 0.1 percentage point. 

CBOT SOYBEAN - Soybean futures on the Chicago Board of Trade were up 0.8 percent at the end of pit trade after the U.S. Department of Agriculture cut its forecast of U.S. soy inventories, traders said. 

* Nearby July soy posted its biggest gain after USDA slashed its forecast of the 2011/12 old-crop U.S. soybean carryout to 175 million bushels, down 35 million from the May estimate and below the average trade expectation of 189 million.

* USDA also lowered its forecast of 2012/13 U.S. soybean ending stocks by 5 million bushels to 140 million, slightly below the average trade estimate of 143 million. 

* Nearby soybeans hit an intraday high of $14.49-1/4 per bushel, the highest spot soybean price since the May 17 peak of $14.50. 

* Contract highs set in soymeal, including the spot July and December contracts. Nearby soymeal reached $439.90 per ton, the highest spot soymeal price in nearly four years. 

* Gains in deferred soybeans limited by spillover weakness from corn and improved weather forecasts for the U.S. Midwest, with more rainfall expected over the next two weeks than previously predicted. 

* Argentine farmers planned to end a week-long sales strike on Tuesday night. The freeze was called last week by growers angry about profit-cutting agricultural policies and a recent tax hike in Buenos Aires province.

* Soybean prices seen remaining firm for the rest of 2012 because of high U.S. exports, but could be pressured by larger South American crops in 2013 - oilseeds analysts Oil World.

* Global soymeal output and demand is likely to rise in 2012/2013, stimulating a 2 million tonne increase in global soymeal exports - Oil World.

FCPO SINGAPORE, June 12 (Reuters) - Malaysian palm oil futures closed lower on Tuesday, as renewed fears over the euro zone debt crisis weighed on investor sentiment and the broader financial markets, although losses were limited by lower palm oil stocks. 

Palm oil, along with other commodities such as crude oil and soybean oil, gained on Monday on news that euro zone finance ministers approved a $125 billion rescue package for struggling Spanish banks. 

But investors feared that the bailout would not be sufficient to solve the crisis and the focus has now shifted to the Greek elections on June 17 that could lead to the nation's exit from the currency bloc. 

"A key factor contributing to the price downtrend is the renewed euro zone debt crisis and uncertain global economic outlook, which have dampened sentiments as well as raising the prospect of lower demand for commodities, including vegetable oils," said Malaysia's Affin Investment Bank in a research note. 

Benchmark August palm oil futures on the Bursa Malaysia Derivatives Exchange lost 0.8 percent to close at 2,965 ringgit ($933) per tonne. 

Traded volumes stood at 26,461 lots of 25 tonnes each, just slightly higher than the usual 25,000 lots. 

Malaysian palm oil stocks were at a 13-month low in May, and that has helped cut some losses. 

Malaysian palm oil exports for the first 10 days of June fell 6.6 percent, said cargo surveyor Intertek Testing Services, going against market expectations of a stronger demand ahead of the Muslim fasting month starting in mid-July. 

Another cargo surveyor Societe Generale de Surveillance reported a slight 1.8 percent increase for exports for the same period.

   
Traders are eyeing a supply-demand report from the U.S. Department of Agriculture (USDA) due later in the day that could show tighter soybean supply and lend support to palm oil. 

Industry players are also watching for any volatility in price movement as this is the first time that the report will be released during active Chicago futures trading hours.

On the technicals front, palm oil is biased to fall below 2,925 ringgit per tonne, as the rebound from its June 4 low has completed, said Reuters market analyst Wang Tao.

Crude oil futures fell below $98 a barrel on Tuesday, extending losses due to fears that the euro zone debt crisis will worsen and hurt the global economy, threatening growth in oil demand. 

In other vegetable oil markets, U.S. soyoil for July delivery gained 0.3 percent in late Asian trade while the most active Jan 2013 soyoil contract on the Dalian commodity exchange closed 0.3 percent lower.     

REGIONAL EQUITY, BANGKOK - June 12 (Reuters) - Stocks in Singapore and Thailand closed higher on Tuesday while other Southeast Asian stocks drifted lower as players remained cautious of a possible Greek exit from the euro zone and doubts over the Spanish bank bailout plan. 

Singapore's Straits Times Index ended up 0.3 percent at 2,797.08, with commodities firm Olam International Ltd rising 2 percent after a share buyback plan which signals management confidence in the company's outlook. 

The Thai SET index edged up 0.4 percent at 1,162.93 amid late bargain hunting which helped send shares in PTT Pcl 1.6 percent higher. 

Stocks in Malaysia, Indonesia and Vietnam fell 0.15 percent, 0.35 percent and 1 percent, respectively. The Philippines market was shut on Tuesday and will reopen on Wednesday.