Trader's highlight

DJI - NEW YORK, Dec 5 (Reuters) - A volatile trading session ended with U.S. stocks mostly higher on Wednesday, even as Apple, the most valuable company in the United States, suffered its worst day of losses in almost four years.

In a strange occurrence, Apple accounted for the entirety of the Nasdaq 100's  fall of 1.1 percent, while the Dow industrials - which do not include Apple as a component - enjoyed the best day since Nov. 28.

With the drop, Apple shed nearly $35 billion in market capitalization, its biggest one-day market-cap loss ever. The company's market value, or market capitalization, now stands at $506.85 billion.

"Today's move is because of index weightings, with the Nasdaq down because of Apple's decline," said Rex Macey, chief investment officer of Wilmington Trust in Atlanta. "The S&P is up because Apple isn't as big a weight in that index, and the Dow is up even more because it isn't there at all."

The broad market seesawed, with the S&P 500 dropping into negative territory before it rebounded off the 1,400 level, seen as a key support point over the past two weeks. Investors cited comments from President Barack Obama suggesting a potential near-term resolution to the "fiscal cliff" wrangling in Washington as a catalyst for the rebound.

The Dow Jones industrial average  rose 82.71 points, or 0.64 percent, to 13,034.49 at the close. The Standard & Poor's 500 Index gained 2.23 points, or 0.16 percent, to 1,409.28. But the Nasdaq Composite Index fell 22.99 points, or 0.77 percent, to end at 2,973.70.

Apple, the largest U.S. company by market capitalization and a big weight in both the S&P 500 and the Nasdaq, fell 6.4 percent to $538.79. Apple is down more than 20 percent from an all-time high reached in late September, putting the stock into bear market territory.

Banking shares were led higher by a 6.3 percent jump in Citigroup to $36.46 after the company said it would cut 4 percent of its workforce. The S&P financial sector index climbed 1.3 percent, and Bank of America hit a 52-week high of $10.55 before pulling back slightly. The stock, a Dow component, ended at $10.46, up 5.7 percent for the day.

Cyclical sectors, which are tied to the pace of economic growth, rallied on optimism about progress on a solution to avoid the fiscal cliff. An S&P index of industrial stocks rose 1.1 percent, buoyed by Caterpillar Inc up 2.2 percent at $86.05, while an S&P index of energy shares climbed 0.7 percent. The Dow Jones Transportation Average gained 0.9 percent, with CSX Corp jumping 2.7 percent to $20.16

Still, Apple struggled throughout the session. Market participants cited a host of reasons for the drop in the iPad maker's stock, including a consultant's report about the company losing share in the tablet market and reports that margin requirements had been raised by at least one clearing firm, as well as year-end tax selling ahead of a possible rise in capital-gains tax rates next year. 

On the Washington front, Obama told the Business Roundtable, a group of chief executives, on Wednesday that a fiscal cliff deal was possible "in about a week" if Republicans acknowledged the need to raise taxes on the wealthiest Americans.

Equities have struggled to gain ground recently because of concerns over the fiscal cliff - a series of mandatory spending cuts and tax increases effective in early January that could push the U.S. economy into recession next year. Recently equities have moved on any whiffs of sentiment from Washington in headlines about negotiations.

"Obama's comments generated a lot of optimism, but to the extent the market believes them, that's how much we're setting ourselves up for a decline if that deadline passes with no progress," said Macey, who helps oversee about $20 billion in assets.

In an interview on CNBC after the market closed, U.S. Treasury Secretary Tim Geithner said that uncertainty over the fiscal cliff was standing in the way of stronger economic growth, and that there was no prospect for an agreement if tax rates didn't rise on the wealthiest taxpayers.

NYMEX - NEW YORK, Dec 5 (Reuters) - U.S. crude futures fell on Wednesday as disappointing economic data from the euro zone and the United States raised concerns about demand for oil, while rising inventories pushed gasoline futures nearly 2 percent lower.

U.S. crude oil inventories fell sharply last week, a report from the U.S. Energy Information Administration said on Wednesday, much more than expected, while gasoline and distillate stockpiles rose more than expected.

CBOT Soybean - Soybean futures on the Chicago Board of Trade hit a near one-month peak and settled higher for a third straight session on a mix of technical buying and talk of renewed export demand from China, traders said.

·                January soyoil  rose above its 50-day moving average and set a one-month high at 51.04 cents per lb, before settling at 51.00 cents. January soymeal  set a near one-month top.

·                Traders cited unconfirmed talk that China may have bought up to six cargoes of U.S. soybeans off the Pacific Northwest this week.

·                Continued support from worries about excessively wet weather in crop areas of Argentina, which has slowed corn and soybean planting. Commodity Weather Group said forecasts looked wetter for the middle of next week, and more showers were likely in the 11- to 15-day period.

·                Paraguay's Senate approved a bill on Tuesday that would impose a 10 percent tax on soybean exports, despite objections from farmers in the world's No. 4 supplier of the oilseed.

·                U.S. cash soy markets remain firm, propped up by strong crush margins. Cash bids for soybeans shipped by barge to the U.S. Gulf Coast firmed early Wednesday on exporter demand and slow barge movement due to low water on the Mississippi River.

·                Background support from Statistics Canada reporting Canadian canola production at 13.3 million tonnes, down 8.9 percent from a year ago and below an average of trade estimates.

FCPO - KUALA LUMPUR, Dec 5 (Reuters) - Malaysian palm oil futures slipped 0.3 percent on Wednesday as expectations of record stocks in November weighed on sentiment, although traders are looking at higher exports and slowing output this month.

Traders are counting on demand to kick in as forward palm oil futures are at a discount to the 3-month benchmark on high stocks. A Reuters survey showed palm oil stocks in November probably grew 2.8 percent to a record 2.58 million tonnes.

More orders are expected from China, the world's No.2 edible oil buyer, before the government imposes stricter quality rules on palm oil cargoes from Jan. 2013.

Higher exports could support palm oil futures that have lost nearly 28 percent this year in their worst annual performance since the 2008 financial crisis.

"The market dropped a little on stocks, the bottom is nearing. We can't be going any lower as exports are going higher in December and production will come off," said a trader with a foreign commodities brokerage.

The benchmark February contract on the Bursa Malaysia Derivatives Exchange settled down 0.3 percent at 2,287 ringgit ($750) per tonne after treading higher in the morning session. The previous day, the contract fell to 2,279, its lowest since Nov. 12.

Total traded volumes rose to 37,113 lots of 25 tonnes each, compared to the usual 25,000 lots.

Reuters market analyst Wang Tao kept a bearish target of 2,200 ringgit per tonne as there was no indication on a possible bullish reversal on this trend.

Malaysian crude palm oil shipments are expected to rise in the next few weeks as planters rush to exhaust their annual tax-free export quota allocation totalling 3.5 million tonnes and which is set to expire at the end of December.

While this may support prices, for now, palm oil is treading lower compared to other commodity markets.

Brent crude edged above $110 a barrel on Wednesday, after two sessions of losses, as investors switched their focus from the United States fiscal crisis to hopes that growth in top energy consumer China to pick up sooner than expected.

In palm oil's competing markets, U.S. soyoil for December delivery edged up 0.5 percent as traders grew concerned that unfriendly crop weather would cut global soy supplies.

The most active May 2013 soybean oil contract on the Dalian Commodity Exchange also rose 0.7 percent.

Regional Equities - Dec 5 (Reuters) - Southeast Asian stock markets mostly ended higher on Wednesday, led by banks on strong volumes on hopes China would maintain its fine-tuning of policies next year to ensure stable economic growth.

However, the optimism was slightly offset by concerns over U.S. lawmakers' ability to break a budget impasse before year-end to avert a possible economic slump.

Singapore added 0.5 percent, led by banking stocks with 1.9 percent rise in United Overseas Bank Ltd and 0.8 percent gain in DBS Group Holdings Ltd

Indonesia  despite suffering a $57.7 million foreign outflow, added 0.4 percent, recovering from a two-month low, due to strong local buying. Bank Central Asia Tbk PT  gained 0.57 percent, while Bank Mandiri Persero Tbk PT  rose 0.61 percent.

Malaysia  added 0.4 percent with $21.23 million net foreign inflow and Vietnam rose 0.9 percent to a near three-week high.

The Philippines , the region's best performer this year, bucked the trend with snapping a seven-session gaining streak and fell 0.3 percent from its record high.