DJI- NEW YORK, July 17 (Reuters) - World stocks and oil prices rose in choppy trade on Tuesday after a gloomy economic outlook by Federal Reserve Chairman Ben Bernanke kept alive views that the U.S. central bank may take further steps to stimulate growth.
Shares and oil had come under pressure earlier in the session, while the U.S. dollar rallied after Bernanke dampened hopes the Fed was moving closer to a third round of bond buying to bolster flagging growth.
But markets reversed course as reactions to Bernanke's testimony before Congress changed. Analysts said the Fed chief's comments on the economy, especially on the jobs market, suggested the central bank was leaving the door open for further monetary stimulus. (nW1E8IB007)
Bernanke said policymakers would consider a range of tools to further stimulate growth if it became clear the labor market was not improving or if deflation risks mounted.
"We do expect the Fed to launch QE3 possibly by as early as August," said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York. "The only game in town to revive or raise GDP growth is the Fed."
U.S. stocks closed higher. The Dow Jones industrial average .DJI finished up 78.33 points, or 0.62 percent, at 12,805.54. The S&P 500 Index .SPX ended up 10.03 points, or 0.74 percent, at 1,363.67. The Nasdaq Composite Index .IXIC closed up 13.10 points, or 0.45 percent, at 2,910.04.
NYMEX- SINGAPORE, July 17 (Reuters) - U.S. crude slipped toward $88 per barrel early on Tuesday, snapping four days of gains on worries of a slowdown in demand after the International Monetary Fund cut its forecast for global economic growth and warned the outlook could dim further.
• U.S. oil CLc1 slipped 30 cents to $88.13 a barrel by 0009 GMT after settling $1.33 higher. Brent LCOc1 slipped 18 cents to $103.19.
• The IMF on Monday cut its forecast for global economic growth and warned that the outlook could dim further if policymakers in the euro zone do not act with enough force and speed to quell their region's debt crisis. (nL2E8IG4SF)
• U.S. retail sales fell in June for the third straight month, the longest run of consecutive drops since 2008 when the country was mired in recession. (nL2E8IGB85)
• Moody's cut the credit ratings of a string of Italian banks on Monday, bringing the country's top lenders in line with a downgrade to Italy's sovereign rating last week, as well as lowering ratings for companies and local government authorities. (nL6E8IGGIK)
• A security team aboard a U.S. Navy refueling vessel fired upon an approaching motor boat off the United Arab Emirates on Monday after it ignored warnings, a U.S. defense official told Reuters, speaking on condition of anonymity. (nL2E8IG7LD)
• U.S. Secretary of State Hillary Clinton said in Jerusalem on Monday that Iran's proposals made in world power talks on its nuclear programme were "non-starters." (nL6E8IGGBQ)
• Policymakers in emerging Asia are stepping up efforts to stimulate growth, and with government debt low and public savings high, chances are good they can spare the region the worst of the rich world's woes. (nL4E8IG1UV)
CBOT SOYBEAN- * Hot and dry weather for the next two weeks will continue to stress corn and soybean crops in the western and northern U.S. Midwest while rainfall in the East will provide some relief to the struggling soybean, an agricultural meteorologist said on Tuesday.
• "The rains will be too late for corn but it will help soybeans. We see upwards to an inch to 1-1/2 inches this week and again next week for Indiana, Ohio and Kentucky," said Don Keeney, meteorologist for MDA EarthSat Weather.
• USDA on Monday said 31 percent of the U.S. corn crop was in good-to-excellent conditions, down from 40 percent in that category a week ago and below an average of analysts' estimates for 35 percent.
• A Reuters poll showed U.S. corn yields at 137.2 bushels per acre,down 6 percent from USDA's current forecast and production at 12.077 billion, down 6.9 percent from USDA's outlook released less than a week ago.
• September is above all key moving averages. The nine-day RSI was at 82.
FCPO- SINGAPORE, July 17 (Reuters) - Malaysian crude palm oil futures ended lower on Tuesday as traders booked profits from the previous day's rally, and the market could resume its advance as persistent hot and dry weather in the United States reduced global oilseeds supply.
Heat from the worst drought seen since 1956 has severely damaged soybeans, with the U.S. Department of Agriculture rating the crop at 34 percent good-to-excellent, down 6 percentage points from the previous week. (nL2E8IGF7P)
A lower quality soybean crop may lead to less soybean oil, which would shift demand to refined palm oil especially as it is trading at a discount of above $200.
"The market is caught between weak internals and strong externals," said a trader with a local commodities brokerage in Malaysia.
"On the domestic front, we have better production for July and the export numbers are shrinking. But externally, the stronger grain prices have made palm attractive in the international market."
The benchmark October palm oil futures FCPOc3 on the Bursa Malaysia Derivatives Exchange fell 1.9 percent to close at 3,062 ringgit ($968) per tonne, pressured by last-minute selling.
Traded volumes stood at 24,317 lots of 25 tonnes each, a tad lower than the usual 25,000 lots.
REGIONAL EQUITY- BANGKOK, July 17 (Reuters) - Most Southeast Asian stock markets rose on Tuesday, extending their gains for a third day with Malaysia hitting an all-time high on hopes of a further monetary stimulus from the U.S. Federal Reserve.
Malaysia .KLSE closed up 0.2 percent after hitting an all-time high of 1,646.97 points, helped by foreign inflows of $16.62 million. Thailand .SETI gained 0.8 percent, rising to its highest since May 8.
Singapore .FTSTI gained 0.5 percent to touch its highest since April 2.
Trading volumes in Bangkok, Singapore, and Kuala Lumpur were higher than their respective 30-day averages due to bargain hunting as investors expected further stimulus from the Federal Reserve, while awaiting its Chairman Ben Bernanke's view on the U.S. economy expected later in the day.
Weak U.S. retail sales and a lower International Monetary Fund global growth forecast on Monday raised hopes of more monetary stimulus from the Fed, as Bernanke was set to give his semi-annual Congressional testimony on Tuesday and Wednesday.
Indonesia .JKSE gained 0.8 percent to hit an over two-month high. Bucking the trend, the Philippines .PSI edged down 0.2 percent after outperforming the region in the previous session.
