5:00PM New York, 11:00PM Frankfurt, 8:00AM Sydney– U.S. stocks declined after General Electric offered weak earnings outlook in its financial division. Stocks banks and financial services companies declined.

Global Markets

The nonpartisan U.S. Congressional office estimated $1.8 trillion in deficit for the current fiscal year, down from the previous estimate of $1.2 trillion. The office also doubled its projection for the deficit in fiscal 2010 to $1.4 trillion.

The CBO estimated gross domestic product to decline 1.5% in fiscal 2009 and surge to 4.1% in the years 2010 and 2011. The unemployment rate is expected to peak at 9.4% before the early part of 2010 and will hover above 7% till 2011.

In New York trading stocks closed lower after General Electric offered weak assessment of its financial arm. In a presentation to financial analysts the diversified conglomerate estimated earnings at GE capital for the year to match its previous estimate of $5 billion but can slide to $2.5 billion if the current economic conditions prevail for the year.

GE (GE) stocks closed down 5.8%, after dropping as much as 7%, to $9.54. General Electric stock has declined nearly 60% in the year so far and plunged 73% in the last one year of trading.

The GE news dragged banks and other financial stocks in today’s trading. Separately, Barclays offered to finance entire purchase price of its ETF unit.

MGM Mirage and Lincoln National drop on debt downgrades. AIG plunges on more investigations in bonus practices. Fluor Corp declines on project halt in Kuwait. AutoNation and Cabot Corp fall on ratings downgrade.

Gold and crude oil prices decline after surging in previous sessions. European industrial production declines in January at a faster pace than in December. Alibaba.com falls on earnings miss. Asian markets close generally lower on weak regional trading.

U.K. stocks closed higher for the second day in a row on a rise in insurance and mining stocks. Banks closed lower. Regus Group Plc surged 31% to 65.5 pence after the rental office services provider reported 2008 annual revenue rise of 25% and earnings gain of 11%.

Markets in Japan were closed.

Hong Kong GDP falls 2.5% in the fourth quarter. Stocks in Shanghai and Hong Kong closed lower after weaker than expected earnings from China Mobile and Alibaba.com Ltd. Hong Kong bankruptcies increase 120% in February. Ahead of bank earnings next weeks, investors sold financial stocks.

Foreign exchange reserve of India rises by $1.4 billion. RBI will unveil its credit policy on April 21. Retail inflation eases to 10.79% in February. In trading, telecom stocks fell on lower text message tariff and L&T declined after the settlement with Grasim on cross holdings.

Australia revised its jobless rate higher and economic growth rate lower. Jobless rate is expected to rise to 7% and economic growth is expected to drop to 0.75% in the current fiscal year. Separately, BHP slashes prices of coal for Japanese customers and other mining companies lower coal prices as well.

North American Markets

Dow Jones Industrial Average declined 122.42 or 1.7% to a close of 7,278.38, S&P 500 Index decreased 15.50 or 1.98% to 768.54, and Nasdaq Composite Index declined 26.21 or 1.8% to close at 1,457.27.

Of the stocks in S&P 500 index, 75 increased, 424 declined and one was unchanged.

AIG led the decliners in the S&P 500 index with a loss of 25.3% followed by losses in Xerox Corp with a loss of 18.3%, XL Capital Ltd of 14.5%, in Host Hotels & Real Estate of 13.5%, in Kimco Realty of 12.9% and in Vornado Realty Trust of 12.8%.

Dynegy Inc led gainers in the S&P 500 index with a rise of 14.5% followed by gains in General Motors of 10.8%, in Ford Motor Company of 9.6%, in Conagra Foods of 3.4% and in Johnson & Johnson of 3.2%.

South American Markets Indexes