4:30PM New York, 10:30 PM Frankfurt, 2:00AM Mumbai – Stocks in New York fell. European markets edged higher led by banks. Emerging markets declined. Brazil fell nearly 3%. India surged to record high. Hong Kong retreated from its record high.

Dow Jones Industrial Average fell 86.25 or 0.61% to 13,961.06, Nasdaq declined 19.37 or 0.71% to 2,727.74, and S&P 500 fell 7.76 or 0.50% to 1,538.87. In Toronto TSX Composite declined 0.84% or 119.40 to close at 14,033.33.

In Brazil, iBovespa Index closed 2.93% lower or 1,816.18 to close at 60,200.94 and in Mexico Bolsa index declined 0.8% or 244.32 to close at 31,207.47. Chile and Peru fell a fraction.

In London FTSE 100 Index edged higher by 34.80 or 0.54% to 6,535.20, in Paris CAC 40 index added 6.91 or 0.12% to close at 5,806.18, and in Frankfurt DAX index increased 0.11% or 8.5 to close at 7,955.30. In Zurich trading SMI added 0.16% or 14.71 to close at 9,088.70.

In Tokyo stock market Nikkei 225 index up 0.9% or 153.11 to close at 17,199.89, in Hong Kong Hang Seng index closed down 2.55% or 719.81 to 27,479.94, in Australia ASX 200 closed up 1.47% or 96.20 to a close of 6,659.90, Sensex surged to another record high and closed up 518.42 or 2.99% to a record close of 17,847.04. In South Korea Kospi index added 2.6% to 2,014.09.

Bond Yields increased on 10-year U.S. bonds to 4.55% and 30-year bond gained to close at 4.79%.

Crude oil fell $0.11 to close at $79.94 per barrel for a front month contract, up 32% for the year so far, natural gas declined 15 cents to $7.28 per mBtu, and gasoline futures increased 1.31 cents to close at 199.59 cents per gallon.

Gold fell $0.60 in New York trading to close at $735.70 per ounce, silver closed up 2 cents to $13.47 per ounce, and copper for front month delivery in London gained $54.00 to $8,222.00 per pound.

Dollar edged higher against euro to $1.4087 from $1.41 and lower to 116.74 yen from 115.81 yen.

Of the 30 stocks in Dow Jones Industrial Average 9 closed higher, 21 closed lower, and none were unchanged. Alcoa led the decliners with a loss of 2.9% to $37.72 followed by a loss of 2.2% in Intel, and 1.6% decline in IBM and Caterpillar. Home Depot led the gainers with a rise of 1.4% followed by increases of 1.1% in Merck, 0.7% in General Motors, and 0.6% in Wal-Mart.

Of the stocks in S&P 500 174 closed higher, 316 fell, and 10 closed unchanged. Twelve stocks fell 3% or more and 15 stocks gained 3% or more. Ciena Corp led the gainers with a rise of 6% followed by increases in Harley Davidson of 5.5%, KB Home of 5.3%, and Circuit City of 5.1%. Temple Inland jumped on the news that Carl Ichan controlled fund has a stake in the company.
Micron Technology led the decliners with a loss of 8.9% followed by losses in Nvidia of 4.2%, in Applied Materials of 3.76%, and Teradata of 3.6%.

In Latin Markets trading Brazil led the decliners with a fall of 3.10% followed by losses of 1.20% in Chile, and 0.87% in Mexico. Argentina fell 0.27%. Of the 63 stocks in iBovespa index 19 gained, 43 lost, and one closed unchanged. Vale Do Rio Doce also known as CVRD lost 8% and led the declining stocks in the index. J P Morgan downgraded the stock on valuation. Bradespar fell 6.5%, Banco do Brasil declined 5.6% and Itau lost 4.4%. Tele Norte Leste jumped 4.6% and led the gainers in the index. Brasil Telecom and Comgas jumped 2%.

In the weekly petroleum report inventories at the end of the last week declined according the EIA. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) rose by 1.2 million barrels compared to the previous week. At 321.8 million barrels, U.S. crude oil inventories are above the upper end of the average range for this time of year. Total motor gasoline inventories decreased by 0.1 million barrels last week, and are well below the lower end of the average range. Finished gasoline fell last week while gasoline blending components rose. Distillate fuel inventories decreased by 1.2 million barrels, and are in the upper half of the average range for this time of year.

3:00PM New York, 9:00PM Frankfurt – Stocks in Paris curtailed gains on defense contractor scandal investigation.

European markets closed fractionally higher led by a rise of 0.54% in UK followed by increases of 0.16% in Switzerland, 0.12% in France and Germany, and fractional loss in Italy. Norway fell on weak oil by 1.6%. Bank stocks were in focus.

Deutsche Bank (DB) closed 2.1% higher after reporting losses in its mortgage related business. The bank reported a combined loss of 2.2 billion euro in various units related to mortgage lending, the third European bank to report such losses. Earlier in the week UBS and Credit Suisse reported large losses and Citigroup reported a loss of $5.9 billion from the credit market jitters.

Credit Suisse (CS) and UBS (UBS) rose more 1%, HSBC (HBC) gained 1.5% and Barclays added 2%. Northern Rock jumped 12% after the news that a private equity group J C Flowers has arranged funding acquire the troubled mortgage lender. Financial Times reported that the leveraged buyout group has secured funding of 15 billion pounds without revealing its source of information.

In Paris trading CAC 40 closed up 0.12% or 6.90 higher to 5,806.18.

Lagardere fell 6% and EADS declined nearly 1% after the French newspaper Le Figaro reported that insider trading charges may be brought against the shareholders and management committee members of EADS.

The French regulator known as Autorite des Marches Financiers is working with prosecutors regarding insider trading involving 26% decline in the stock of EADS maker of Airbus. Production delays at Airbus A380 superjumbo plane wiped out more than 25% of its value between June 9th and 14th. Lagardere owns 7.5% in the French defense contractor. A380, the largest plane to hold more than 500 people has suffered production delays of more than two years and cost overrun with the current price tag of $18 billion from $12 billion estimated three years ago.

Executives that are likely to face prosecution according to Le Figaro article include Tom Enders, former co-chairman of EADS Manfred Bischoff, head of its North American unit Ralph Crosby, chief executive of EADS Arnaud Lagardere, and head of sales John Leahy.