DJI- NEW YORK, Oct 3 (Reuters) - Crude oil prices fell sharply on Wednesday as signs of a slowdown in China and Europe stoked worries about petroleum demand, while the dollar rose after better-than-expected news on the U.S. economy.
Wall Street ended modestly higher as better-than-expected U.S. labor and service-sector data fueled optimism about the recovery, but the Dow industrials were hobbled by a slide in Hewlett-Packard HPQ.N.
The euro zone's economic woes worsened last month and China's slowdown looked likely to extend to a seventh quarter, suggesting recent bold actions by global central banks have yet to convince consumers to start spending again.
The concerns about China and Europe overshadowed supportive data from U.S. Energy Information Administration's (EIA), which showed an unexpected fall in U.S. crude stocks last week.
"The global economy is in a rut, and even with supportive EIA data crude is down," said Dan Flynn, an analyst at Price Futures Group in Chicago.
Brent November crude futures LCOc1 lost $3.40 to settle at $108.17 a barrel. U.S. November crude CLc1 shed $3.75 to settle at $88.14 a barrel€ and dropped to $87.70 in post-settlement trading, its lowest since Aug. 3.
On Wall Street, the Dow Jones industrial average .DJI ended up 12.25 points, or 0.09 percent, to 13,494.61. The Standard & Poor's 500 Index .SPX closed up 5.24 points, or 0.36 percent, to 1,450.99. The Nasdaq Composite Index .IXIC gained 15.19 points, or 0.49 percent, to 3,135.23.
The pace of growth in the vast U.S. services sector, which dominates the country's economy, picked up in September, while private employers added more jobs last month than expected, industry reports showed.
The data came ahead of the first of three presidential debates Wednesday night in Denver and the government's closely watched monthly payrolls report on Friday.
"The ADP numbers were good and the services index was good, but we are missing the big catalyst to keep the market up," said Jack De Gan, principal and senior advisor at Harbor Advisory in Portsmouth, New Hampshire.
"The next big catalyst will be Friday's employment numbers if we don't get any news out of Europe on the progress of Spain's bailout before that."
The S&P's consumer discretionary sector index .GSPD rose 0.8 percent. It was the best-performing S&P 500 sector, helped by stocks like Amazon AMZN.O, up 2.1 percent at $255.92, and homebuilders like PulteGroup PHM.N, up 6 percent at $16.50.
Shares of Hewlett-Packard HPQ.N dropped sharply after the company warned on Wednesday of a darker outlook for 2013 earnings, reflecting slow progress on CEO Meg Whitman's turnaround plan. Its stock fell to a nine-year low.
The MSCI global stock index .MIWD00000PUS dropped 0.1 percent to 333.19. The FTSEurofirst-300 index of pan-European shares .FTEU3 slipped 0.1 percent to end at 1,100.84 points.
DOLLAR STRENGTH
The dollar rose to a two-week high against the yen. The latter was pressured after Japan's newly appointed Finance Minister Koriki Jojima said he is ready to take steps to thwart a strong yen, which has hurt exports and the economy.
Against the yen, the dollar rose as high 78.58 yen JPY=, its highest since Sept. 19. It was last at 78.51 yen, up 0.5 percent on the day.
The euro lost 0.1 percent to $1.2900 EUR=.
Spain's prime minister, Mariano Rajoy, on Tuesday quashed speculation the country could apply for a bailout as soon as this weekend, but expectations are high that Spain will eventually request aid.
Signs of a slowdown in China weighed on metals prices, with copper down after four days of gains. China accounted for 40 percent of refined copper demand last year.
Benchmark copper on the London Metal Exchange CMCU3 traded at $8,290 a tonne, down from Tuesday's close of $8,325.50. The metal, which is used in power and construction, had gained more than 2 percent over the past four sessions.
Gold edged up, defying a drop in crude oil and a firmer dollar, as the encouraging U.S. data bolstered bullion's investment appeal as an inflation hedge.
NYMEX- NEW YORK, Oct 3 (Reuters) - U.S. crude futures fell 4 percent on Wednesday as disappointing economic data from China and Europe reinforced concerns about slowing growth, even after data showed U.S. crude stocks fell last week and other supportive U.S. data strengthened the dollar.
U.S. Energy Information Administration data showed U.S. crude stocks fell 482,000 barrels last week, against forecasts stockpiles would be up 1.5 million.
CBOT SOYBEAN-Most Chicago Board of Trade soybean futures contracts were firm on Wednesday on bargain buying and technical gains as the market recovered from a three-month low earlier in the session, traders said.
* Traders said soybeans had become technically oversold and there was key psychological support at $15 per bushel. The session low was $15.04, the lowest price for that contract since $15.04-1/2 on July 6. ( See http://link.reuters.com/kyv92t )
• November closed above its 100-day moving average of $15.26-1/2, a bullish technical close.
• INTL FCStone estimated 2012 U.S. soybean production at 2.849 billion bushels and an average yield per acre of 38.2 bushels. USDA's current forecast is for production of 2.634 billion bushels and yield at 35.3 bushels per acre. USDA will release its October crop report on Thursday, Oct. 11.
• Minor slowdowns in harvesting the U.S. corn and soybean crops are expected over the next two weeks, but overall progress is seen continuing at a record pace, an agricultural meteorologist said on Wednesday. "There should be good progress. There are just a couple of frontal systems with light rain in each one," said Andy Karst, meteorologist for World Weather Inc.
• Rainfall is expected to continue this week in southern Brazil, and updated weather maps on Wednesday indicated increased rains later next week in central and western Brazil, Karst said. The wet weather in southern Brazil threatened to delay the wheat harvest and delay early corn and soybean seedings.
• Soybean spot basis bids jumped around the U.S. Midwest on Wednesday as sales slowed amid a steep drop in futures.
• Key resistance for November at the 50-day moving average of $16.57 and key support at the 100-day moving average of $15.26-1/2. The nine-day relative strength index for November is at 26.
FCPO- SINGAPORE, Oct 3 (Reuters) - Malaysian palm oil futures ended up on Wednesday on bargain hunting after prices dropped to their lowest in nearly three years earlier in the session, although traders said the recovery could be short-lived as fundamentals remained weak.
Palm oil, which on Tuesday suffered its steepest daily fall since the 2008 financial crisis on weaker-than-expected demand and rising stocks, extended losses in early trade to hit 2,230 ringgit per tonne, a level not seen since November 2009.
But the lower prices lured buyers back to the market.
The benchmark December contract FCPOc3 had surged 4.3 percent to 2,351 ringgit ($769) per tonne by the close, its biggest daily percentage gain since October 2010. Palm oil has shed more than 15 percent over the last five sessions.
"When prices dropped so sharply, the market was severely oversold," said a trader with a local commodities brokerage in Malaysia. "Today maybe there will be some rebound or technical pullback. I don't think it will last that long, but it will try to cover whatever gaps there are in technical charts."
Total traded volumes stood at 50,577 lots of 25 tonnes each, double the usual 25,000 lots as the previous day's plunge enticed traders.
Palm oil prices, down almost 26 percent so far this year, are expected to stay under pressure due to high inventory levels as production outstrips demand.
Traders and plantation owners are bracing for September inventory levels in Malaysia to surpass August's 10-month high, with palm oil exports in September hovering around 1.4 million tonnes, barely moving from a month ago. PALM/ITS PALM/SGS
"We expect this trend (of production outpacing exports) to continue through the fourth quarter, keeping inventory levels above 2 million tonnes, a psychological range seen as denoting an ample supply of CPO (crude palm oil) in the market," Alan Lim Seong Chun, research analyst with Malaysia's Kenanga Investment Bank, wrote in a note to clients.
"Hence, the CPO price upside should be limited."
In a bearish sign for palm oil, crude oil prices fell on Wednesday, as weak data from Europe and China dimmed the outlook for demand, while Europe's festering debt crisis added to the gloom. O/R
In other vegetable oils markets, U.S. soyoil for December delivery BOZ2 slipped 0.3 percent in late Asian trade. The Dalian Commodity Exchange will resume trading on Oct. 8 after a week-long holiday in China.
REGIONAL EQUITY- BANGKOK, Oct 3 (Reuters) - Stocks in Singapore, Malaysia and Indonesia edged slightly lower in light to moderate volume on Wednesday as commodities and energy shares such as Golden Agri-Resources GAGR.SI followed weak oil market amid concerns about global outlook.
Singapore-listed commodities firm Golden Agri-Resources fell 3.1 percent, dragging down the benchmark Straits Times Index .FTSTI that ended the day 0.06 percent lower. The index hovered around a near two-week high of 3,082.24 at one point.
After a choppy session, Bangkok's SET index .SETI ended up 0.1 percent, retreating from a 16-year intraday high of 1,311.67, weighed down by a 0.6 percent loss of top energy firm PTT PTT.BK.
Malaysian bourse said foreign investors bought shares worth 70 million ringgit ($22.94 million) while retail and domestic institutions were net sellers.
