DJI - NEW YORK, March 5 (Reuters) - The
Dow Jones industrial average soared to a record closing high on Tuesday,
breaking through levels last seen in 2007 and as investors rushed in to join
the party in anticipation of more gains.
Signs of a strengthening U.S.
economy, continued support from the Federal Reserve, and fairly attractive
valuations compared to other assets have boosted the Dow by almost 9 percent so
far this year. A strong reading in the U.S. services sector, which accounts for
the bulk of economic activity, was the latest indicator of improving demand.
"I'm surprised at the speed of
the gains, which have come at a pace that we can’t annualize. But stocks are
still not expensive, and we can expect to continue getting a reasonable advance
from here," said Jim McDonald, chief investment strategist at
Chicago-based Northern Trust Global Investments, who helps oversee $760 billion
in assets.
Gains came across the board, with 10
of the Dow's 30 component stocks reaching new 52-week highs on a day when 456
securities hit new yearly highs on the New York Stock Exchange. The Dow Jones
Transportation Average also closed at a new high after rising 1.5
percent.
About 71 percent of the NYSE stocks
closed higher while 67 percent of Nasdaq-listed shares ended in positive
territory. About 6.41 billion shares changed hands on the New York Stock
Exchange, the Nasdaq and NYSE MKT, slightly below the daily average so far this
year of about 6.48 billion shares.
About 16.9 million contracts changed
hands in the U.S. options market on Tuesday, according to options analytics
firm Trade Alert. The turnover consisted of 8.90 million calls and 8.01 million
puts. The overall option turnover was in line with last month's daily average
of 16.89 million contracts.
The blue-chip Dow's forward 12-month
price-to-earnings ratio was at 15.87, compared with 16.99 during the 2007
highs, according to Thomson Reuters Datastream. The S&P 500's
price-to-earnings ratio was at 13.5.
The Institute for Supply
Management's services index showed growth accelerated in February to its
fastest pace in a year. Still, some areas of the economy haven't recovered as
well as equity prices have since the financial crisis. The unemployment rate is
at an elevated 7.9 percent, far above the 4.7 percent rate at the time of the
Dow's previous high.
Markets have shrugged off the
stalemate between the congressional Republicans and the White House over
automatic U.S. government spending cuts, known as the "sequester."
Other recent headwinds, including political turmoil in Europe, have also been
navigated without much pain, with investors using any decline as an opportunity
to buy.
"The economy is still expanding
and improving despite the risk of higher taxes and lower spending,"
McDonald said. "While you can never rule out a correction, we don't see
the economy or the Fed getting in the way of the market."
The Dow Jones industrial average shot up 125.95 points, or 0.89 percent, to close at 14,253.77. The Standard
& Poor's 500 Index gained 14.59 points, or 0.96 percent, to
1,539.79. The Nasdaq Composite Index climbed 42.10 points, or 1.32 percent, to 3,224.13.
Brent Crude Oil - NEW YORK, March 5 (Reuters) - Brent
crude broke a five-day losing streak on Tuesday, rising by more than 1 percent
toward $112 a barrel on optimism over Chinese oil demand, record-high U.S.
equities and North Sea supply disruptions.
Oil prices extended their rise
slightly in post-settlement trading after the announcement of Venezuelan
President Hugo Chavez's death, ending the socialist leader's 14-year rule of
the oil-rich South American country.
Brent crude futures rose $1.52 per barrel to settle at $111.61. The front-month contract for April
delivery rose as high as $111.93 a barrel in post-settlement activity, following
the announcement of Chavez's death.
CBOT Soybean - March 5 (Reuters) - Soybean futures on the Chicago Board of
Trade rose on Tuesday, briefly topping $15 a bushel, on export demand for
dwindling supplies of old-crop U.S. soybeans, traders said.
- Front-month soybeans futures broke through psychological resistance at $15 a bushel for the first time since Feb. 22 but closed below that level.
- Soymeal followed soybeans higher while soyoil closed lower.
- USDA said private exporters reported sales of 330,000 tonnes of U.S. soybeans to unknown destinations for the current marketing year and 345,000 tonnes to China for delivery in 2013/14.
- Trade expects USDA on Friday to lower its forecasts for end-year 2012/13 U.S. and world soybean stocks to reflect poor crop weather in Argentina and robust demand for scarce U.S. supplies.
- The average analyst estimate for U.S. 2012/13 soybean ending stocks was 120 million bushels, down from USDA's February forecast of 125 million.
- Brazil's government will release its next official soybean crop forecast on Thursday, March 7.
- Brazil's vegetable oils association Abiove held its soy crop forecast unchanged at a record 82.3 million tonnes.
- Strength in outside markets lends support. The Dow Jones
industrial average hit a record high as major world stock markets rallied
after China pledged more government spending to boost economic growth and
data showed the U.S. service sector expanding at its fastest pace in a
year.
BMD CPO - KUALA LUMPUR, March 5 (Reuters) -
Malaysian palm oil futures edged down in thin volume on Tuesday after gains in
the previous session lifted prices from near two-month lows, with traders
focusing on a key industry conference to determine strategies.
The benchmark May contract on the Bursa Malaysia Derivatives Exchange fell 0.6 percent to 2,399 ringgit
($772) per tonne by the day's close. Prices traded in a tight range of 2,389 to
2,428 ringgit.
A technical bounce on Monday had
helped prices snap eight straight sessions of declines and move higher from
levels last seen in mid-January.
"There was an attempt to push
the market higher yesterday and some anticipation about a follow through in
buying, but nothing materialized," said a trader with a local commodities
brokerage in Malaysia.
"Traders are mostly waiting on
the analysts and speakers for more clues. There will probably be slow trading
until tomorrow," he added. The palm oil conference being held in the
Malaysian capital runs March 4-6.
Several palm oil refineries have
slowed operations and some plan to halt output if a Malaysian military attack
on an armed Filipino group on Borneo island drags on, potentially disrupting
supply of the tropical oil to China, refinery officials told Reuters on
Tuesday.
Sabah, part of Borneo island, is
Malaysia's top oil palm growing region, accounting for a quarter of national
production. Much of the palm oil from Sabah is shipped to China -- the world's
second-largest consumer of edible oils.
The development was not impacting
prices significantly so far, traders, analysts and government officials said.
But prolonged supply disruptions could buoy prices, although climbs would
probably be limited as high stock levels in the country continue to weigh.
"If the turmoil drags on for
weeks and months, it could have a more severe impact on production," CIMB
Investment Bank said in a note. "The security fears may also affect the
operations of ports located near where the clashes are taking place."
In other markets, Brent crude
futures rose towards $111 per barrel on Tuesday, bucking a five-day losing
streak on bargain buying after China pledged to keep its economy growing at 7.5
percent.
In competing vegetable oil markets,
U.S. soyoil for May delivery edged down 0.1 percent in late Asian trade. The most-active September soybean
oil contract on the Dalian Commodity Exchange inched up
0.1 percent.
Regional Equities - BANGKOK, March 5 (Reuters) - Most
Southeast Asian stocks rose on Tuesday along with gains in Asian peers, with
the Philippine index nearing its record high close as large-cap Philippine Long
Distance Telephone (PLDT) rose on robust quarterly profits, but an
overbought Indonesia retreated.
Asian shares climbed on Tuesday as a
globally accommodative monetary stance helped revive risk appetite.
The MSCI's broadest index of
Asia-Pacific shares outside Japan was up 1 percent while the MSCI's
index of Southeast Asia was 0.4 percent higher.
The Philippine index snapped its two-day losing streak, ending up 1.12 percent at 6,711.72, just shy
of its record close of 6721.45 hit on Feb. 28. PLDT shares jumped to five-year
highs after it posted a six-fold rise in quarterly profit.
Telecom firms also led among gainers
in the region such as Singapore Telecommunications Ltd and Malaysia's DiGi.Com Bhd .
In Bangkok, investors bought Shin Corporation Pcl partly due to a high dividend payout.
Bucking the trend, Indonesia edged down 0.2 percent as investors sold recent gainers such as banks. PT Bank
Rakyat Indonesia, which hit a record high on Feb. 28,
extended losses for a third session, falling 2.3 percent.
Vietnam's Ho Chi Minh Stock
Exchange's VN Index dropped 1.4 percent, adding on Monday's 1.8
percent loss, due to pressure from margin calls and weak buying demand.
