DJI- NEW YORK, June 21 (Reuters) - U.S. stocks posted the worst day in three weeks on Thursday on mounting evidence that slowing manufacturing growth worldwide threatened corporate profits.
Shares of energy and materials companies led declines as commodity prices fell. U.S. crude futures slipped below $80 a barrel for the first time since October and the S&P energy sector index <.GSPE> lost 4 percent. Investors said weak overseas demand was responsible for the decline in those industries.
Stocks' slide was accelerated by a bearish call from Goldman Sachs, which recommended clients build short positions in the broad S&P 500 index on expectations of more economic weakness. [ID:nL1E8HLESN]
"We are recommending a short position in the S&P 500 index with a target of 1,285," (roughly 5 percent below current levels), Goldman Sachs said in a note.
Business activity across the euro zone shrank for a fifth straight month in June and Chinese manufacturing contracted, while weaker overseas demand slowed growth by U.S. factories. [ID:nL1E8HL9AU]
"While we've seen only two of many regional manufacturing surveys for June, there is a clear deterioration taking place, with only the degree being the broad issue," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
The Dow Jones industrial average <.DJI> was down 251.35 points, or 1.96 percent, at 12,573.04. The Standard & Poor's 500 Index <.SPX> was down 30.19 points, or 2.23 percent, at 1,325.50. The Nasdaq Composite Index <.IXIC> was down 71.36 points, or 2.44 percent, at 2,859.09.
"The market was extremely overbought coming into this week, and the news gave it an excuse to sell off," said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida.
Softening data globally lifted hopes of central bank action to support the economy. The U.S. Federal Reserve announced on Wednesday it would extend one monetary stimulus program and said it was ready to do more to help economic growth if necessary.
After the bell, Moody's Investors Service cut the credit ratings of 15 of the world's biggest banks in a highly anticipated move that was part of a broad review of major financial institutions. [ID:nL1E8HCCPK]
Among the moves, Moody's cut JPMorgan Chase & Co's long-term senior debt to A2 from Aa3 and assigned it a negative outlook negative. It also cut Morgan Stanley's long-term senior unsecured debt to Baa1 from A2 and also assigned it a negative outlook.
NYMEX- NEW YORK, June 21 (Reuters) - U.S. crude oil futures slumped nearly 4 percent on Thursday to end at an eight-month low as dreary economic data from China, the United States and the euro zone and abundant crude oil supply extended the week's sell-off.
CBOT SOYBEAN- Soybean futures on the Chicago Board of Trade fell by the close of pit trading, halting a three-day rally in the front contract, as profit-taking and concerns about a slowdown in global economic growth overshadowed worries about dry weather threatening U.S. crop prospects.
* Stocks on major markets fell and crude oil prices slumped $2 a barrel after data showed Chinese, European and U.S. manufacturing activity slowing further, a day after the Federal Reserve extended its monetary stimulus program. [MKTS/GLOB]
* Nearby July soybeans traded higher at times on expectations of fresh export demand for old-crop U.S. soybeans and spillover support from soymeal futures, which rose on strong export sales.
* USDA reported export sales of U.S. soymeal in the latest week at 282,000 tonnes, well above trade expectations for 50,000 to 150,000 tonnes.
* USDA reported weekly sales of U.S. soybeans at 608,000 tonnes, below a range of trade estimates for 700,000 to 900,000 tonnes. Top buyer China accounted for 434,000 tonnes for 2012/13 delivery, but canceled 83,100 tonnes for 2011/12 delivery. [ID:nIGB21404A]
* USDA reported weekly export sales of U.S. soyoil at 20,400 tonnes, above trade expectations for 5,000 to 15,000 tonnes.
* Cropcast, a private weather service, lowered its U.S. 2012 soybean crop yield estimate to 42.4 bushels per acre, from its previous forecast of 44.1 and USDA's outlook of 43.9. [ID:nL1E8HLB3G]
* Traders eyeing moderate open interest the $14.40 and $14.50 strikes in soybeans ahead of July options expiration at 1:15 p.m. CDT (1815 GMT) on Friday.
FCPO- SINGAPORE, June 21 (Reuters) - Malaysian crude palm oil futures edged lower on Thursday as traders booked profits from rallies earlier in the week, while sentiment also turned cautious on weak economic data and disappointing stimulus measures by the U.S. Federal Reserve.
Palm oil prices hit a three-week high after the midday break on concerns that dry weather in the United States could tighten global oilseeds supply, but the gain could not be sustained as bleak data showing a slowdown in Chinese and European factory activity took centrestage. [ID:nL3E8HL0Z9][ID:nL5E8HKER8]
The move by the Fed to extend its programme of selling short-term securities and buying longer-dated ones disappointed investors who had hoped for a third round of quantitative easing, weighing on financial markets across the board. [ID:nL1E8HKEKN]
Benchmark September palm oil futures on the Bursa Malaysia Derivatives Exchange slipped 1.4 percent to close at 3,000 ringgit ($945) per tonne. Prices went as high as 3,062 ringgit, a level unseen since June 1.
Traded volumes stood at 36,568 lots of 25 tonnes each, much higher than the usual 25,000 lots as activities picked up after the midday break.
Palm oil prices are however on track for a more than 5 percent gain this week, after three straight weeks of losses.
"The Greek election brought in some funds buying," said a trader with a domestic commodities brokerage in Malaysia, referring to gains in palm oil earlier this week on optimism stemming from the victory of pro-bailout parties in Greece.
"However the surge also brought in demand destruction and palm olein prices above $990 saw very few takers."
Rising exports confirmed stronger demand for the tropical oil on last-minute buying ahead of the Muslim fasting month thatstarts in late July.
Malaysian palm oil exports grew 15 percent to above 990,000 tonnes in the first 20 days of the month, said cargo surveyor Intertek Testing Services and Societe Generale de Surveillance. [PALM/ITS] [PALM/SGS]
Adding to the supportive factors for palm oil was the dry weather in the United States as the U.S. Department of Agriculture (USDA) said unfavourable weather had damaged soybean crop quality.
A lower soybean crop to be crushed into soybean oil could shift more demand to the cheaper refined palm oil.
REGIONAL EQUITY- June 21 (Reuters) - All Southeast Asian stock markets fell on Thursday, mostly led by commodities shares, on renewed global growth concerns after Chinese factory activity shrank for the eighth straight month.
Though the U.S. central bank extended its programme of selling short-term securities and buying longer-dated ones as expected, it did not signal a more aggressive third round of quantitative easing, further disappointing some investors. [ID:nL1E8HKEKN]
A survey of private sector activity in China compiled by HSBC showed its giant factory sector had shrunk for an eighth straight month in June on weaker demand for exports.
Thailand <.SETI> fell 1.2 percent led by energy shares, Singapore <.FTSTI> ended 0.9 percent weaker, dragged down by a 5.4 percent fall in commodities firm Olam International Ltd
, and the Philippines <.PSI> closed 0.7 percent down.
Indonesia <.JKSE> lost 1.2 percent, though it saw $2.5 million of foreign inflow, while Malaysia <.KLSE> edged down 0.2 percent despite enjoying $31.99 million of net foreign buying on Thursday.
"The market was following the rest of the region with shares related to oil and coal coming down," said Harry Su, head of research at Jakarta-based brokerage Bahana Securities, referring to Indonesian market.
"We have been downgrading the prices of coal-related shares and that might have knock-on effect on the other shares as well."
