4:30PM New York, 10:30PM Frankfurt, 2:00AM Mumbai – Stocks in New York trading settled after a week of rallying. Housing stocks declined ahead of earnings from Lennar. Dollar fell against euro. Hong Kong, India, and Australia closed record high.

Dow Jones Industrial Average lost 61.13 or 0.44% to 13,759.06, Nasdaq decreased 3.27 or 0.12% to 2,667.95, and S&P 500 declined 8.02 or 0.53% to 1,517.73.

FTSE 100 Index in London gained 9.20 or 0.14% to 6,465.90, in Tokyo stock markets closed but closed at to 16,312.61, down 0.62% or 101.18 in Friday trading, and in Brazil, iBovespa Index closed 1.6% higher or 920.58 to 58,719.37.

Bond Yields fell on 10-year U.S. bonds to 4.62% and 30-year bond to close at 4.88%.

Crude oil fell $0.67 to close at $80.95 per barrel for a front month contract but still up 33% for the year so far, natural gas added 29 cents to $6.38 per mBtu, and gasoline futures declined 3.11 cents to close at 208.34 cents per gallon.

Gold added $0.40 in New York trading to close at $739.30 per ounce, silver closed up 2 cents to $13.64 per ounce, and copper for front month delivery in London fell $4.00 to $7,916.00 per pound.

Dollar fell to record low $1.41 to a euro and traded at parity with Canadian dollar. Dollar is trading at multi-year low against euro, Indian rupee, Brazilian real, Norwegian Kroner, and British pound among several other currencies. Dollar fell against twelve Asian currencies and two Latina American currencies.

Of the 30 stocks in Dow Jones Industrial Average, 22 closed lower, 8 closed higher, and none was unchanged. Microsoft led the gainers with a rise of 1.5% followed by increases of 0.6% in Procter & Gamble, 0.45% in Boeing and Intel. Citigroup led the decliners with a loss of 1.9% followed by losses of 1.7% in Home Depot and J P Morgan, 1.5% in American Express, 1.1% in Honeywell and 1% in Alcoa.

Of the stocks in S&P 500, 141 stocks closed higher, 357 fell, and 2 closed unchanged. Twenty five stocks declined more than 3%. E*Trade Financial declined 7.3% to $12.54 followed by losses of 6.5% in Pulte Home, 6.2% in Countrywide Financial, 5.6% in KB Home, 5.5% in Harman International, 5% in Centex, and 4.5% in Lennar. Circuit City, DR Horton, and Tellabs lost 4%.


In New York tech and mining stocks rallied in the morning but financials and home builders came under a new pressure. In the morning, in the absence of any economic news, traders focused on weakness in dollar against euro, pound and other currencies. In the overnight trading Asian markets climbed sharply higher led by a record close in Hong Kong, India, and Australia. Broker recommendation of Oracle and EMC helped tech stocks to rally in the morning. Dow and Nasdaq jumped 0.6% after the first ninety minutes of trading. Mining stocks gained sharply on firm copper, gold, and zinc prices.

By mid-day Dow traded in the negative territory as traders focused on earnings report from Lennar due tomorrow and housing market data on Tuesday and Thursday. A report from IMF suggested that sub-prime mortgage market crisis will take time to stabilize. Stocks of Citigroup, J P Morgan, and Bank of America fell on the report. Apple rose 3% after Citigroup revised its price target to $185 from $160 and EMC gained 8% after rating revision from the bank and Bear Stearns.

In the last hour of trading a sharp weakness in housing stocks dragged S&P 500 and Nasdaq lower. A report in New York Times also suggested that E*Trade may have underestimated problem in its mortgage portfolio dragging the stock down 7%. Home builders at close fell between 5% and 6%. UK building materials maker reported 12% lower earnings and offered uncertain outlook for the rest of the year on weakness in housing market in the U.S.

Lennar is expected to report a loss of at least 50 cents in the quarter compared to a profit of $1.30 per share a year ago.

General Motors (GM: chart) and UAW ended their several day long negotiations with no agreement. The United Auto Workers representing 73,000 workers called off the negotiations after setting 11:00AM deadline this morning. General Motors has lost total of $12 billion in the years 2005 and 2006 and is looking for a sharp reduction in labor and health care costs from the Union. Separately, Ford (F: chart) chief executive announced that the company is on track to reach profitability by 2009.

Mining stocks around the world closed higher on a deal between two iron ore producers in Australia. The Australian $2.4 billion deal between Sundance and Gindalbie lifted iron ore and other metal producers. Brazilian iron ore giant CVRD (RIO: chart) jumped 4%, Freeport McMoran jumped 3% but closed fractionally lower, and Southern Copper Peru jumped 2% on the news in New York trading.

In Latin Markets trading Brazil led the gainers with a rise of 1.6% followed by increases of 1.1% in Argentina and a loss of 0.13% in Mexico. Chile declined 0.9%. Of the 63 stocks in iBovespa index 41 gained, 20 lost, and two closed unchanged. Tele Norte led the decliners with a loss of 6% followed by losses of 3.5% in Tam, 2.6% in Vivo, 2.3% in airline Gol, and 2% in Brasil Telecom and Telesp. Perdigao led the gainers with a rise of 5.3%.

1:00PM New York, 6:00PM London – Miners led the stocks in UK trading. August budget deficit rose to a record 9.1 billion pounds. UK banks upbeat about plans to introduce changes in the banking system.

UK stocks advanced on the first day of the week trading to close firmer at 0.14% or 9.2 to 6,465.9 spurred by gains from mining shares Rio Tinto Antofagasta, BHP, Vedanta and Xstrata plc demand for yellow metal as an alternative investment.

Of the FTSE 100 shares, 39 gained, 62 declined while 1 stock remained unchanged. Northern Rock fell further. Antofagasta led the winners on the FTSE 100 stocks. BHP was the second on news that it has discovered what could be the world largest gold reserve in southern Australia.

Gold traded near its highest level since 1980 in London as the dollar weakened to record levels against the euro and twelve currencies in Asia. Northern Rock slid amid speculation that it may not pay its interim dividend. Northern Rock has not issued a statement on the interim dividend so far.