DJI - NEW YORK, March 26 (Reuters) - U.S.
stocks rallied on Tuesday, with the Dow climbing more than 100 points to
another record close and the S&P 500 coming within striking distance of its
all-time closing high, as strong data on home prices and manufacturing fed
optimism about the economy.
The Dow Jones industrial average initially
surpassed its 2007 record closing high on March 5. Since then, the Dow has
reached a series of subsequent nominal record highs.
In Tuesday's session, the S&P
500 made yet another attempt at a record, but failed to break above the
all-time closing high for the second day this week.
At Tuesday's close, the S&P 500
was only 1.38 points below its lifetime closing high. On Monday, the benchmark
index traded just a quarter point below its record closing high, which stands
at 1,565.15 set on Oct. 9, 2007, and then retreated as investors sold some
equities to cash in on gains in the wake of the news out of Europe.
Data showed U.S. single-family home
prices rose in January at the fastest pace in more than six years, while
long-lasting U.S. manufactured goods, also known as durable goods orders, shot
up in February.
"I think the batch of data was
enough to convince investors that the U.S. economy is on the right track,"
said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co, in
New York.
"At this point, it's hard to
argue that anything will derail the U.S. economy, and that is boosting
investors' confidence as they continue to load up on equities."
Still, investors may look for
reasons to take profits, with the S&P 500 up nearly 10 percent so far this
year. The rally has lifted the benchmark index near its all-time closing high,
which it nearly reached on Monday.
The Dow Jones industrial average rose 111.90 points, or 0.77 percent, to end at 14,559.65, a record closing
high. The Standard & Poor's 500 Index gained 12.08 points, or 0.78 percent, to finish at 1,563.77. The Nasdaq
Composite Index advanced 17.18 points, or 0.53 percent, to
close at 3,252.48.
"If there's a run on deposits,
there may be a selloff (in U.S. stocks), but that could pose an excellent entry
point to get into the market and take advantage of this rally," said Todd
Schoenberger, managing partner at LandColt Capital, in New York.
But investors remained concerned
about the negative implications of a financial rescue plan for Cyprus. They
worried that it would serve as a template for other euro-zone economies
requiring bailouts.
Banks
in Cyprus will remain closed until Thursday and will then be subject to capital
controls to prevent a run on deposits. President Nicos Anastasiades said late
on Monday that a 10-billion-euro ($13 billion) rescue plan approved over the
weekend was "painful" but essential to avoid economic meltdown.
Oils - NEW YORK, March 26 (Reuters) - Brent
crude rallied late on Tuesday to settle up more than $1 above $109 a barrel,
after U.S. crude had surged to a five-week high above $96 a barrel, lifted by
stronger manufacturing and housing data in the United States.
Brent's premium to U.S. crude narrowed to as little as $12.52 a barrel at one point, the smallest in eight
months. Brent's late rally moved the spread back to around $13 a barrel.
The spread has narrowed sharply from
$23.45 in February. An improving U.S. economy and increased pipeline flows from
the Midwest has supported the U.S. benchmark oil contract. Meanwhile, Brent's
price has been pressured by increased supplies from the North Sea and concerns
about Europe's economy, with Cypriot banks closed until Thursday.
Trading in Brent crude was choppy until the final hour of the session, when prices started to rally,
eventually settling up $1.19 at $109.36 a barrel.
Brent has slid from above $119 a
barrel in early February, but analysts and traders said market uncertainty may
be abating.
U.S. crude settled up $1.53 at $96.34 a barrel, its highest closing price since Feb. 19.
"Brent had been limited by the
concerns about Cyprus, but those seemed to give way to allow Brent to move up
on the same supportive economic data from the United States," said Phil
Flynn, analyst at Price Futures Group in Chicago.
U.S. IMPORTS LESS CRUDE
Surging U.S. crude production over
the past two years has widened Brent's premium, as stockpiles have swollen
around the U.S. contract's land-locked delivery point in Cushing, Oklahoma.
But increased pipeline capacity is
now starting to move more oil from the Midwest to coastal refineries. Producers
are also shipping more crude to premium-priced markets via rail cars.
"The erosion (of the U.S. crude
premium) is because U.S. shale production is decreasing imports of light sweet
crude grades," said Seth Kleinman, head of energy research at Citigroup.
Kleinman said Brent-U.S. crude
spread could narrow to $10 per barrel but was unlikely to shrink much further
because of the increased cost of moving U.S. oil supplies while the inland
infrastructure is still improving.
Data from industry group the American Petroleum
Institute late on Tuesday showed U.S. crude oil stocks rose 3.7 million barrels
last week, much higher than forecast in a Reuters survey of analysts.
Inventories of gasoline and diesel also both fell more than expected.
CBOT Soybean - Soybean futures on the Chicago Board of Trade rose on firm cash markets, technical buying and positioning ahead of key
U.S. government stocks and acreage reports due out Thursday,
traders said.
·
Port
congestion in Brazil added support to nearby soybean contracts,
slowing the movement of a projected record-large Brazilian
soy harvest into export channels.
·
Soybeans
gained against corn on inter-market spreads.
·
Buying
picked up as the benchmark May soybean contract broke through its 50, 200 and 20-day moving
averages.
·
Domestic
soy processors firmed their basis bids for soybeans
in some locations due to slow farmer selling. But some crusher
discounted offers for soymeal as demand slowed.
·
Global
equity markets and other commodities such as crude oil rose
after more data pointed to an improving U.S. economy and helped
offset any fallout from the Cyprus bailout.
·
Ahead of
USDA's March 28 planting intentions and quarterly stocks
reports, the average estimate for March 1 soybean stocks among
analysts surveyed by Reuters was 935 million bushels, a nine-year
low, down from 1.374 billion bushels a year earlier.
·
Trade
expects USDA to project record-large U.S. soybean plantings
for 2013. The average analyst estimate was for 78.394 million
acres, which would surpass the 2009 record of 77.451 million.
·
Agroconsult
raised its estimate of Brazil's soybean harvest to
84.4 million tonnes, from 84.2 million earlier this month.
·
But German
analyst Oil World cut its forecast of Brazil's soy crop
to 81.3 million tonnes, from 82.0 million last month.
·
Oil World
cut its forecast of Argentina's 2013 soybean harvest to
48.5 million tonnes, from 50.0 million previously, citing poor weather.
BMD CPO - SINGAPORE, March 26 (Reuters) - Malaysian
palm oil futures edged lower on Tuesday in rangebound trading amid concerns
over lower export demand, while worries about the potential impact of a Cyprus
bailout scheme also dented investor appetite for riskier assets.
Cyprus's deal with international
lenders to shut down the country's second largest bank in return for 10 billion
euros in rescue funds removed the immediate risk of a financial meltdown, but
it also stoked fears of similar tough conditions for future bank rescues in the
euro zone.
Palm oil came under more pressure as
Malaysian exports fell by 7.5 percent for March 1 to 25 compared to a month ago
due to a slowdown in crude palm oil shipments.
"The market is stuck and it's
looking for further direction. We are looking at 2,400 ringgit for
support," said a trader with a local commodities brokerage in Malaysia.
By market close, the benchmark June
contract on the Bursa Malaysia Derivatives Exchange
had lost 0.8 percent to 2,442 ringgit ($788) per tonne. Prices traded in a
tight range from 2,426 to 2,452 ringgit.
Total traded volume stood at 22,264
lots of 25 tonnes each, thinner than the usual 25,000 lots as most investors
were waiting for further trading cues.
Market players are counting on
seasonally slower production in Malaysia, the world's second-largest palm
producer, to bring stocks down this month.
Inventory level stood at 2.44
million tonnes in February with leading analyst Dorab Mistry forecasting a drop
below 2 million tonnes in June.
Traders are also looking out for
export data for the full month to see if demand is strong enough to offset
imports and production. A surprise drop in shipments for the first 25 days of
March due to lower exports to major buyers Europe and India may continue to
weigh on the market.
In other markets, Brent fell
slightly, remaining within its range of the past two weeks, as the effect of
the Cyprus bailout faded and traders saw little direction for the market.
In vegetable oil markets, U.S.
soyoil for May delivery lost 0.2 percent in late Asian trade. The
most-active September soybean oil contract on the Dalian Commodities Exchange closed 0.4 percent lower.
Regional Equities - BANGKOK, March 26 (Reuters) - Thai
stocks rose for a second day on Tuesday as investors bought telecom stocks on
strong growth prospects while Indonesian shares climbed to their two-week high
amid expectations the parliament would approve a new central bank governor.
Stocks in Singapore ,Malaysia and the Philippines ended higher while Asia was steady amid worries Cyprus's bailout could be a
template applicable to larger states that might get into difficulty.
Bangkok's SET index gained 1.3 percent to 1,544.03, further recovering from last week's 7.5 percent
loss, led by a 4 percent gain in telecoms shares such as Total Access Communication and Advanced Info Service.
CIMB analyst Teerawut Kanniphakul
said a launch of 3G service by telecom operators this year was fundamentally
positive for the sector.
"Telecoms stocks are among good
defensive plays in the event of high market volatility. The sector has a growth
story with high dividend payouts," he said.
Jakarta's Composite Index finished up 0.9 percent at 4,842.52, hitting a two week intraday high of
4861.76 at one point as market investors expected Finance Minister Agus
Martowardojo to win parliament's approval to become the next head of the
central bank.
"I think parliament will
approve Agus Marto as the Central Bank Governor. The market should be positive,
and at this point the market has already reflected the outcome," said
Jakarta-based John Teja, director of Ciptadana Securities.
The Indonesian rupiah turned slightly higher on inflows to the country’s stocks and bond markets,
traders said.