DJI- NEW YORK, Nov 9 (Reuters) - U.S. stocks and oil prices gained on Friday on a rise in U.S. consumer sentiment to a more than five-year high, outweighing gloom that the "fiscal cliff" in the United States and Europe's economic woes may lead to a world recession.
Stocks later trimmed their gains after President Barack Obama said any deal with Congress to avert a fiscal crisis must come with higher taxes on the wealthiest Americans.
U.S. Treasury bonds cut losses to trade almost flat on Obama's remarks, in which the newly re-elected president invited congressional leaders to the White House next week to start negotiating.
A 3.5 percent gain in gold prices this week was bullion's biggest weekly rise since late August and reflected a hedge against economic uncertainty.
The so-called fiscal cliff, aimed at cutting the federal budget deficit, could take an estimated $600 billion out of the economy in automatic spending cuts and tax hikes, severely hindering economic growth.
"Clearly taxes are going up and that is something the market doesn’t like. There is concern the economy continues to weaken, and there is not much left in the tank in terms of making corporate profitability better," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.
The surprisingly strong sentiment survey showed American consumers felt more optimistic about employment prospects and the economic outlook, according to a Thomson Reuters/University of Michigan index, easing the gloom from Europe.
The Dow Jones industrial average .DJI closed up 4.07 points, or 0.03 percent, at 12,815.39. The Standard & Poor's 500 Index .SPX rose 2.34 points, or 0.17 percent, at 1,379.85. The Nasdaq Composite Index .IXIC gained 9.29 points, or 0.32 percent, at 2,904.87.
European shares provisionally ended flat, paring losses on the U.S. data, which included a government report that wholesale inventories rose in September by the most in nine months. Inventories are a key element in the government's measure of economic growth.
Falling industrial output in France, Italy and Sweden and a warning from a German ministry that Europe's largest economy was expected to slow further rattled investors.
Also weighing on investors was news that euro zone finance ministers are unlikely to release a new tranche of loans to Greece on Monday because there is no agreement on how to make its debt sustainable.
"It's the core Europe now, not just the peripheral Europe, that may be sliding into a recession," said Boris Schlossberg, managing director of FX Strategy at BK Asset Management in New York. "If that happens, then China will lose its export market and the whole global economy will begin to contract.
"The market is very afraid that Europe could drag the whole global economy down."
Oil pushed higher in choppy trading, lifted by the improved U.S. consumer sentiment and Chinese data indicating a strengthening economy. O/R
U.S. crude futures CLc1 gained 98 cents to settle at $86.07 a barrel, while Brent LCOc1 futures settled $2.15 higher at $109.40 a barrel O/R.
The euro dropped to a two-month low against the U.S. dollar and could extend losses as fears mount that the euro zone's debt crisis and deteriorating economic conditions could drag on global economic growth.
The euro was down 0.27 percent at $1.2711 EUR= and was seen vulnerable to further losses. The dollar index .DXY rose 0.31 percent to 81.041.
Gold XAU= hit a three-week high of $1,738.66 an ounce before pulling back. Spot gold prices rose $1.47 to $1,731.40.
U.S. COMEX gold futures for December GCZ2 settled up $4.90 at $1,730.90 an ounce.
Prices of safe-haven U.S. Treasuries slipped as stock gains sparked by improved consumer sentiment whetted investors' appetite for riskier assets.
The benchmark U.S. Treasury 10-year note was flat in price to yield 1.6165 percent. US10YT=RR
NYMEX-NEW YORK, Nov 9 (Reuters) - U.S. crude futures rose on Friday, receiving a lift from a rise in a consumer sentiment reading as well as from gains in gasoline futures.
Crude posted a 1.4 percent gain for the week, snapping a string of three weekly declines.
CBOT SOYBEAN-Front-month soybean futures on the Chicago Board of Trade fell nearly 3 percent to a 4-1/2 month low on Friday after the U.S. Department of Agriculture raised its estimate of the U.S. 2012
soybean crop more than traders expected.
* The benchmark January soybean contract SF3 filled a gap in its chart dating back to July, but stayed above major support at its 200-day moving average at $14.49.
• CBOT soybeans Sc1 ended the week down 4.9 percent, their biggest weekly slide in seven weeks. Soymeal SMc1 fell 5.5 percent for the week and soyoil BOc1 fell 3.0 percent.
• USDA raised its estimate of U.S. 2012/13 soybean production to 2.971 billion bushels, above an average of trade estimates for 2.892 billion. USDA raised its average soy yield estimate to 39.3 bushels per acre, from 37.8 in October, citing beneficial late-season rainfall.
• USDA raised its projection for U.S. 2012/13 soybean ending stocks to 140 million bushels, up from 130 million in October and above the average trade estimate for 131 million.
• USDA raised its forecast of U.S. 2012/13 soyoil ending stocks, but left soymeal stocks unchanged as an increase in soymeal exports offset an increase in production.
• Informa Economics raised its forecast of U.S. 2013 soybean plantings to a record-high 80.1 million acres, from its previous projection of 79.987 million and up from 77.2 million acres seeded in 2012. Informa forecast 2013 soy production at a record-high 3.459 billion bushels.
• Satisfactory crop weather forecasts in Brazil and Argentina added pressure.
• Malaysian palm oil futures fell to a one-month low ahead of stocks data from the Malaysian Palm Oil Board on Monday that traders say may show another record high in October.
FCPO- SINGAPORE, Nov 9 (Reuters) - Malaysian palm oil futures fell to a one-month low on Friday, posting their steepest weekly loss since September, as traders stayed cautious ahead of key industry reports.
The Malaysian Palm Oil Board (MPOB) reports stocks data on Monday, which could show inventories at a record-high 2.67 million tonnes at end-October, according to a Reuters survey.
"Positioning ahead of the MPOB report will continue. Effects of weather vagaries will become clearer in the weeks and months ahead," a trader with a commodities brokerage in Malaysia said, referring to year-end floods that could hurt output and lift prices.
"But a hangover from high supply will certainly send any price recovery into a tailspin," the trader added.
Traders are also expecting higher forecasts for U.S. soybean crops from a U.S. Department of Agriculture report later in the day, which could mean a higher supply of rival soybean oil and weigh on palm oil prices.
At the close, the benchmark January contract FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 0.9 percent to 2,316 ringgit ($757) per tonne. Prices had earlier fallen to 2,308 ringgit, the lowest since Oct. 3.
Total traded volumes stood at 40,042 lots of 25 tonnes each, much higher than the usual 25,000 lots.
Malaysian palm oil futures have lost more than 27 percent so far this year, weighed down by record high stocks and global economic uncertainty. For the week, prices posted a 7.2 percent loss, their worst since the end of September.
In related markets, Brent crude held steady above $107 per barrel on Friday as worries about the U.S. fiscal health and its impact on oil demand growth, already dented by a weak global economy, capped price gains.
REGIONAL EQUITY- BANGKOK, Nov 9 (Reuters) - Major Southeast Asian stock markets closed mostly weaker-to-flat on Friday, with Thai stocks capping the worst weekly loss in the region, in line with downbeat global stock market sentiment due to concerns over the U.S. fiscal cliff.
Bangkok's SET index .SETI fell for a fourth straight session, ending the day down 0.22 percent, with weekly loss rising to 1.2 percent. Singapore's Straits Times Index .FTSTI inched down 0.1 percent, leaving losses for the week at 1 percent.
Among the leading decliners, Thai Oishi Group OISH.BK plunged 22 percent after the food and beverage firm reported a third-quarter net loss, while Singapore's Noble Group NOBG.SI dropped 8 percent after the commodities trader reported lower-than-expected earnings for its third quarter.
Malaysia's main index .KLSE ended nearly unchanged, recouping earlier losses, as battered stocks such as Axiata Group Bhd AXIA.KL regained some ground lost recently. It was down 0.9 percent on the week. Jakarta's Composite Index .JKSE inched up 0.13 percent, down 0.12 percent on the week.
