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GLOBAL MARKETS-Stocks mixed, commods jump before Slovak EU vote

Published 10/11/2011, 05:04 PM
Updated 10/11/2011, 05:08 PM
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* Stocks end up on pre-earnings support after choppy run

* Oil at $110 in London, U.S. wheat jumps most in a year

* Slovak vote on aid fund delayed but analysts confident (Updates with closing prices)

By Barani Krishnan

NEW YORK, Oct 11 (Reuters) - Stocks ended a volatile session with slight gains and commodities extended their rally on Tuesday as investors held back from big bets ahead of U.S. earnings reports, as well as on concerns about the euro zone debt crisis.

Wall Street stocks settled in mostly positive territory -- helped by bets on third-quarter results from aluminum producer Alcoa Inc -- while sentiment was still fragile from the sell-off of the past month.

"Earnings are always important but even more so here after several quarters of solid earnings across many industry sectors. I think investors are going to want to see that continuing or solidifying itself," said Michael Cuggino, president and portfolio manager of Permanent Portfolio Funds in San Francisco.

"Otherwise, you could see further sell-offs," he added.

In commodities trading, crude oil settled up 1.5 percent at above $110 a barrel in London.

Agricultural markets in Chicago surged, with wheat rising over 8 percent -- its most in a year -- to finish above $6.60 a bushel on bets that a U.S. government crop report due Wednesday would show smaller-than-expected grain stockpiles.

The Dow Jones industrial average <.DJI> lost 16.88 points, or 0.15 percent, to end at 11,416.30. But the benchmark Standard & Poor's 500 Index <.SPX> rose 0.65 point, or 0.05 percent, to 1,195.54. The Nasdaq Composite Index <.IXIC> was up 16.98 points, or 0.66 percent, at 2,583.03.

"The market was overshot on the downside and now we're making it up to a certain degree," said Wayne Kaufman, chief market strategist at John Thomas Financial in New York.

In Monday's trading, the S&P jumped 3 percent, lifting the index above its 50-day moving average the first time since late July, though the gains came on thin volume due to the Columbus Day holiday.

With the S&P near the upper end of its recent range, it is unclear whether institutional buyers will support the market further or if it will retreat.

Alcoa's stock closed up 2 percent at $10.30, making it the best performer in the Dow. The top U.S. aluminum producer reported higher revenue and earnings in the third quarter from a year ago, though results were down from the second quarter of this year. [ID:nASA02XLI]

Global stocks, as measured by MSCI's All-Country World index <.MIWD00000PUS>, gained 0.4 percent. The index has rallied recently on improved sentiment, particularly after a weekend pledge by German and French leaders to come up with a plan to tackle the debt crisis. [ID:nP7E7KK00E]

A new twist emerged this week in the Europe's financial debacle as investors nervously awaited Slovakia to become the last of 17 EU member states to vote to boost the size and powers of the European Financial Stability Facility.

A delay in a key vote by Slovakia on expanding the euro zone rescue fund kept investors cautious. [ID:nL5E7LB0V9]

The vote in Slovakia's parliament may not pass until later this week, complicating access to funds that could stem the crisis. That may rattle markets through the week, as it adds an element of uncertainty to a fragile trading environment.

"It seems like the vote is a little in doubt. Everyone is on hold waiting on what's happening with the European Union," said Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida.

The euro initially fell on Tuesday after the latest twist in Europe's financial debacle, before rebounding.

The FTSEurofirst 300 <.FTEU3> index of top European shares, closed down 0.3 percent, after rising 1.7 percent on Monday.

Prices of U.S. Treasuries fell, erasing gains that brought benchmark yields to historic lows last week, as investors' most acute anxiety over Europe's debt crisis subsided. The benchmark 10-year U.S. Treasury note was down 23/32 from Friday, its yield at 2.1567 percent. (Additional reporting by Caroline Valetkevitch, Ashley Lau, Chuck Mikolajczak and Richard Leong in New York, and Anirban Nag in London; Editing by Dan Grebler)

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