4:30PM NY, 10:30 PM Frankfurt, 2:00AM Mumbai – Global Markets

Market averages in New York fell dragged by weak earnings from Altria, Pfizer and weak operating news from Intel and Yahoo. Airlines reported falling earnings on rising revenue and load factor. European markets closed sharply lower led by 1.8% decline in Germany. Singapore led the Asian markets lower with near 2% loss. TAM Air fell 10% on aircraft accident.

Yields edged lower on 10-year U.S. bonds and closed at 5.01% and 30-year bond rose to close at 5.101%.

Crude oil jumped $1.03 cents to close at $75.05 per barrel, natural gas closed up 22 cent to $6.53 per mBtu, and gasoline futures increased 9.4 cents to close at 219.53 cents per gallon.

Gold traded up $7.80 to close at $673.70 per ounce, silver increased 27 cents to close at $13.29 per ounce, and copper futures lost $26 to close at $7,840 per metric ton.

Dow Jones lost 52.11 to 13,919.44, Nasdaq dropped 12.80 to 2,699.45, and S&P 500 declined 3.17 to 1,546.20. Trading averages declined at the open on core rate of inflation and housing starts data. The sell hastened in the afternoon after the comments from the Fed Chairman indicating that inflation may return. In the early after three averages lost more than 1%. In the last fifteen minutes of trading averages made a comeback to trim majority of the losses as oil traded above $75 but bond yields did not change.

Latin American Markets declined following the losses in New York and European trading. Mexico lost 0.8% followed by 0.5% decline in Brazil and Argentina. Chile bucked the trend and edged up 0.06%.

Tam Air plane skidded off the runway at Sao Paolo airport and burst in flames killing at least 170 people. The airline stock fell 9% in Sao Paolo trading, and dropped 8.65% in New York trading. Gol Air fell 2.2% on the worries that the strained air travel infrastructure may hurt the travel sentiment. The last night accident was the second in less than 12 months. Gol Air plane crashed 10-month ago killing 154 people. It was raining at Sao Paolo city airport, Congonhas airport, controlled by the government has been prone to flooding and at the time of the accident. The airport according the authorities had been closed 18 times due to flooding in the first quarter.

European Stocks closed lower across the region on the worries that rising euro may hurt export oriented stocks. Germany led the region with a loss of 1.8% followed by 1.7% decline in France and Switzerland, 1.4% decrease in the UK, and near 1% lower in Italy and the Netherlands.

Takeover news dominated the headlines. Spain based Altadis, cigarette maker, agreed to a merger offer from Imperial Tobacco for $17.91 billion or 50 euros per share. British supermarket received overtures for takeover from an investment fund controlled by Qatar. In recent months the fund, Delta Two has raised its stake to 25% from 7% fueling a speculation that it may buy the supermarket operator.


Asian Stocks closed lower on rising oil and weakness in New York and European trading. Singapore led the region with a loss of 1.85% followed by 1.4% decline in Sri Lanka, 1.1% decrease in Japan. South Korea, Thailand and Hong Kong fell nearly 1%. Shanghai bucked the trend with a gain of 0.9% followed by 0.14% increase in Philippines and 0.07% rise in India.

Tokyo Electric Power fell 4% on the worries that its nuclear power plant may be closed in the earthquake region. Sinopec fell 3.8% in Hong Kong trading on the news that its production and refining numbers missed the target set by the company. The news dragged other oil companies in Hong Kong trading lower including PetroChina and Cnooc. Singapore raised taxes for land development to cool the strong real estate market. China Southern Airlines took off to the daily limit of 10% in Shanghai trading.

Thailand lowered its interest rate, a fifth decline in a row, to 3.25% from 3.5% to stem the flow of foreign investments in the stock market and cool off the rising currency.


2:30PM New York – Broader averages declined 1% on worries related to mortgage bonds and weak earnings from airlines and companies including Altria, Pfizer and Intel.

Market averages traded lower after first three hours of trading. Weak earnings news dominated trading sentiment in the morning hours. Pfizer reported 48% decline in earnings. Intel earnings jumped 44% but reported a sharp decline in gross margins. The stock fell 4.5%. Yahoo reported nearly flat earnings and lost 5.3% on the worries that company’s growth is likely to lag that of the industry for several quarters. AMR, parent of American Airlines earnings declined on higher operating costs. Domestic carrier, Southwest profit fell on higher load factor and increased capacity. Cigarette maker, Altria Group earnings fell 18% and stock declined 1.6%.

AMR (AMR: chart) reported the second quarter net income of $317 million compared to $291 million from a year ago. The earnings per share declined to $1.08 from $1.19. Revenue for the quarter rose 1.6%. The stock on the news fell 1.2%. Delta (DAL: chart) reported second quarter profit of $1.77 billion compared to a loss of $2.21 billion. The company earnings per share in the quarter were $4.49 compared to a loss of $2.21 on a revenue increase of 5.5% to $5 billion. In the third quarter Delta expects domestic capacity to fall between 1% and 3% and international capacity to rise 13%. Southwest Airlines (LUV: chart) earnings in the latest quarter fell to $278 million from $333 million or earnings per share declined to 36 cents from 40 cents. The revenue in the quarter increased 5.5% to $2.58 billion. Fuel cost in the quarter rose 24% on 14% higher jet fuel cost per gallon.


9:30AM New York – Market averages in New York fell on a decline in housing permits and stable core rate of consumer price index.

Labor Department reported that the June consumer price index increased 0.2% after adding 0.7% in May. Core rate of inflation, excluding food and energy gained 0.2% in the month and up 2.2% from a year ago. Energy prices fell 0.5% but gained 5.4% from a year ago on 1.1% drop in gasoline prices. Prices for food rose 0.5% after adding 0.3% in May.