DJI - NEW YORK, Dec 4 (Reuters) - U.S.
stocks finished slightly lower in a quiet session on Tuesday as the
back-and-forth wrangling over the "fiscal cliff" gave investors
little reason to act.
Trading volume was light as
legislators continue to negotiate a deal to avoid a $600 billion package of tax
hikes and federal spending cuts that would begin Jan. 1 and could push the
economy into recession.
Just 5.86 billion shares changed
hands on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the
year's daily average of 6.48 billion shares.
Optimism for progress was dented
after remarks by President Barack Obama, who rejected a Republican proposal to
resolve the crisis as "out of balance" and said any deal must include
a rise in income tax rates on the wealthiest Americans.
"People don't know if what's
going on is political posturing or real negotiations that represent
progress," said Bernard Baumohl, managing director and chief global
economist at the Economic Outlook Group in Princeton, New Jersey.
Expectations of higher taxes on
dividends beginning in 2013 have pushed many companies to pay special dividends
this year or advance their next payback to investors. Coachbecame the latest
to move up the date of its next dividend payment, and the news lifted shares of
the upscale leather-goods maker earlier in the session. By the close, though,
Coach was down 1.2 percent at $57.52.
One of the S&P 500's top sectors
for the day was health care , considered a
defensive group.
The Dow Jones industrial average fell 13.82 points,
or 0.11 percent, to 12,951.78 at the close. The Standard & Poor's 500 Index
dipped 2.41
points, or 0.17 percent, to 1,407.05. The Nasdaq Composite Index shed 5.51 points,
or 0.18 percent, to close at 2,996.69.
The market has been sensitive to
rhetoric from Washington, as a failure to
reach an agreement could send the U.S. economy back into recession.
Still, many expect a resolution to be found, which could extend the S&P
500's rally of 12 percent so far this year.
Differences within the Republican
Party came to the fore on Tuesday as one senator opposed to raising taxes
lashed out at Republican House Speaker John Boehner for proposing to increase
revenue by closing some tax loopholes.
Congressional Republicans recently
proposed steep spending cuts to bring down the budget deficit, but gave no
ground on Obama's call to raise tax rates on the rich. The proposal was quickly
dismissed by the White House.
"We're on hold trying to figure
it out, but investors are stressed since they have to make decisions soon about
how to proceed with their investments if taxes are indeed going up. We could
see a real pick-up in volume over the next week or so," Baumohl said.
NYMEX - U.S. crude futures nursed losses near $88.50 per barrel, as
investors fretted about the health of the U.S.
economy and lack of progress in fiscal deficit negotiations, but bubbling
tensions in the Middle East supported prices.
CBOT Soybean - Spot
soybean futures on the Chicago Board of Trade rose for a second
day as a late technical rally offset early pressure from favorable
crop weather in Brazil,
traders said.
· January soybeans rallied in the closing minutes of trade after holding support near the 20-day moving average of $14.36-3/4. Soymeal also rallied to close higher while soyoil pared losses.
· Analysts at FCStone do Brasil reduced their forecast for Brazil's 2012/13 soybean crop to 80.01 million tonnes, down from the firm's September estimate of 81.98 million, citing lower yield expectations due to dryness in the southern producing regions.
· Informa Economics raised its forecast of Brazil's 2012/13 soybean crop to 81.4 million tonnes, from 81.25 million previously and above USDA's November estimate of 81 million.
· Informa lowered its forecast for Argentina's soybean harvest to 58.4 million tonnes, from 59.5 million a month ago, citing a reduction in expected plantings.
· In Brazil, storms were forecast late this week for drier sections of central and southern soybean areas, easing concerns about dryness, the Commodity Weather Group said. Excessive rains remain a problem for Argentina.
· Basis bids for soybeans shipped by barge to the U.S. Gulf Coast were mostly steady early on Tuesday, with nearby values at a premium to deferred amid solid demand from exporters and tight supplies in the marketing pipeline, traders said.
· The United States may be facing tight domestic soyoil supplies because of the current export surge of U.S. soyoil, oilseeds analysts Oil World said. Unusually large sales of U.S. soyoil in the second half of November mean the known U.S. soyoil export commitments for the Oct. 2012/Sept. 2013 season have now reached at least 611,000 tonnes, it said.
· Malaysian palm oil futures fell to a three-week low as investors fretted over the prospects of another month of record stocks in the world's No.2 producer.
FCPO - KUALA LUMPUR, Dec 4 (Reuters) -
Malaysian palm oil futures fell to its lowest in more than three weeks on
Tuesday as investors fret over the prospects of another month of record stocks
in the world's No.2 producer.
Spot December contract was trading
at a 8 percent discount to the benchmark February futures, signalling
oversupply and keeping investors on edge although seasonally slowing output and
Chinese demand should curb stockpiles.
Record high stocks in Indonesia and Malaysia will see palm oil futures
post their worst annual performance since the financial crisis in 2008. Palm
oil prices have lost nearly 28 percent so far this year also on the deepening
euro zone debt crisis affecting global economic growth.
"There is plentiful stock
around -- that's the reason why the market is still technically weak. The local
front is bearish," said a trader with a foreign commodities brokerage.
"Exports are holding quite
well, the demand is still strong. But unless you see a draw down in inventory,
the market will be under pressure," he added.
The benchmark February contract on the Bursa
Malaysia Derivatives Exchange fell as much as 2,279 ringgit per tonne, the
lowest since Nov. 12, before closing at 2,298 ringgit ($756) per tonne.
Total traded volumes surged to
42,981 lots of 25 tonnes each, nearly doubling from the usual 25,000 lots.
Technicals showed that palm oil
would revisit its Nov. 12 low of 2,220 ringgit per tonne, said Reuters market
analyst Wang Tao.
Malaysian crude palm oil exports are
expected to rise in the next few weeks thanks to stronger demand from China ahead of
Lunar New Year celebrations in February, and stricter import rules next year.
"We have assumed crude palm oil
exports to increase by 5 percent to 1.85 million tonnes in November as Chinese
traders are expected to stock up," Kenanga Investment Bank analyst Alan
Lim said in a note to clients.
Kenanga expects inventory levels to
"remain close to the very high level of 2.5 million tonnes" and keep
crude palm oil prices below 2,500 ringgit in the near term.
Weak manufacturing data from the United States renewed concerns of slowing demand
from the world's biggest oil consumer, offsetting optimistic factory data
issued by China
a day earlier.
Regional equities - Dec 4 (Reuters) - Thailand's stock
market edged down on Tuesday from a 16-1/2-year high while others closed mixed
with Philippines hitting a record close for a seventh session as confusing
signals on the global economy weighed on the region's risky assets.
An unexpected contraction in the
United States' November manufacturing activity, which hit a three-year low,
along with stalled budget negotiations dented investor sentiment, though
Greece's bond buy-back plan helped to boost appetite.
The Thai benchmark index fell 0.2 percent
from its highest since April 1996, led by a 2.2 percent fall in the country's top
oil and gas explorer, PTT Exploration and Production Pcl , after the
company announced plans on Friday to raise $3 billion in a share offer.
Singapore ended a tad weaker, down 0.1 percent. Indonesia lost 0.8 percent
to close at a two-month low, with $56 million in foreign outflows. Banks led
the fall, with Bank Central Asia (BCA) dropping 7.9
percent.
The Philippine benchmark index ended at 5,706.28,
above Monday's record of 5,672.70, on strong trading volumes, with conglomerate
Aboitiz Equity Ventures Inc gaining 2.5
percent.
Vietnam rose 0.8 percent, while Malaysia ended steady.
