4:30PM New York, 10:30PM Frankfurt, 2:00 AM Mumbai

Market averages in New York traded sideways ahead of busy week. Fed action on Tuesday, earnings from Lehman Brothers, Morgan Stanley, Goldman Sachs, and Bear Stearns, and options expiry at the end of week are likely to turn indexes volatile.

Dow Jones Industrial Average gained 0.10% or 12.84 to 13,437.72, Nasdaq fell 2.38 or 0.09% to 2,598.68, and S&P 500 declined 0.48 or 0.03% to 1,483.47. For the week Dow gained 2.5% followed by 2.1% rise in S&P 500 and 1.4% increase in Nasdaq.

FTSE 100 Index in London gained 57.70 or 0.91% to 6,363.90, in Tokyo Nikkei 225 closed at 15,821.19, up 0.15% or 23.59, and in Brazil, iBovespa Index traded higher 1.97% or 1,062.09 to 54,944.80.

Bond Yields on 10-year U.S. bonds were unchanged at 4.46% and 30-year bond yields fell to close at 4.72%.

Crude oil declined $0.99 to close at $79.10 per barrel record close for a front month contract, natural gas closed up 25 cents to $6.28 per mBtu, and gasoline futures fell 1.0 cents to close at 203.64 cents per gallon.

Gold lost 10 cents in New York trading to close at $717.80 per ounce, silver closed 2.5 cents higher to close at $12.71 per ounce, and copper for front month delivery in London gained $121 to $7,604.00 per pound.

Of the 30 stocks in Dow Jones Industrial Average, 14 closed lower, 16 closed higher, and none were unchanged. Alcoa led the gainers with a rise of 3.3% to $35.57 followed by 2.6% gain in General Motors, 2% in McDonalds, and 1.6% in United Technology. American Express led the decliners with a fall of 2.9% followed by losses in Intel of 1.8%, Hewlett Packard of 1.03%, and IBM of 0.97%.

Of the stocks in S&P 500, 301 stocks closed higher and 196 fell, 3 closed unchanged. Thirteen stocks in index gained more than 3%. RadioShack led the gainers with a rise of 7.7% followed by gains of 5% in King Pharmaceuticals, 4.4% in Centex and D R Horton. Yahoo jumped 4.3% and Wendy’s added 4%. Cardinal Health led the decliner with a fall of 5%, followed by 3.3% loss in Tenet Healthcare, and 3% in McKesson. New York Times fell 3% to $19.80 and CSX Corp declined 2% to $38.29.

In New York trading stocks edged sideways ahead of a busy week. The Fed decision on Tuesday is likely to dominate trading sentiment. Investors are hoping that the rate cut on Tuesday will support sagging credit markets with some hoping that the Fed may lower rates by 50 basis points. Brokers are also scheduled to release earnings during the week with Lehman Brothers scheduled on Tuesday. Investors are looking for estimate of losses from credit derivatives and exposure to mortgage market. The securitization business has dramatically slowed down but its full impact may not be revealed in the earnings report. Merrill Lynch indicated that the adjustment in values of subprime mortgage assets is likely to crimp earnings.

In economic news retail sales in August increased 0.3% followed by revised 0.5% increase in July according to the Commerce Department. Auto and parts sales in the month jumped 2.8% lifting total retail sales, excluding the auto sales increase the retail sales would have edged lower by 0.4%, sharpest decline in a year.

In another report the Labor Department said that the prices for import in August fell 0.3% on lower oil and natural gas import prices.

In European Markets trading indexes closed lower. Indexes in Switzerland, Spain, and UK led the region. Spain led the decliners with a fall of 1.5% followed by losses of 1.3% in Sweden, 1.2% in UK and Switzerland, 0.8% in Italy, and 0.5% in Germany.

In Latin Markets trading Mexico led the decliners with a fall of 0.7% followed by a loss of 0.43% in Brazil. Argentina led the gainers with a rise of 0.4%. Of the 63 stocks in iBovespa index 32 gained, 29 lost, and 2 closed unchanged. Natura led the decliners with a loss of 2.5% followed by declines of 1.7% in Vale do Rio Doce and Petrobras.

China raised rates on bank deposit by 0.27% to 3.87% and on one-year loan rate by the same amount to 7.29%. The fifth rate hike in the year and higher reserve required for the banks by the central bank has not slowed the economy so far. The trade surplus has pumped nearly $160 billion in the country’s banking system and most of it has found its way into real estate and stock markets. Stocks in China are trading at nearly 50 times earnings and real estate prices are rising more than 10% a year for homes and commercial properties. While European and American banks are battling credit squeeze, China is working hard to stem inflation and excess liquidity in the market. Inflation for the year so far has been above 6%, above the target rate of 3% set by the central bank.


3:00PM New York, 8:00PM London - UK stocks plunged deeper Friday into negative territory. UK economic growth is likely to be 1% lower from the initial projection of 3% due credit market malaise. Bank of England bails out Northern Rock with emergency funding.

London stocks reversed earlier gains dropping 1.2% Friday amid renewed investor-concerns over the U.S subprime mortgage market problems. London had gained marginally Wednesday and Thursday on firmer oil and metal stocks. Of the 102, FTSE 100 index shares 94 slumped and 8 gained.

In London trading FTSE 100 dropped 1.2% or 74.6 at 6,289.30 led by heavy losses in financial shares. There were renewed investor worries the U.S. housing market turmoil was far from over after giant London bank, Northern Rock sought emergency funding from the Bank of England.

Bank of England announced Thursday that it had injected 4.4 billion pounds as liquidity to support banks, among them Northern Rock plc, the UK fourth largest home lender. This was just a day after BoE governor Mervyn King had played down the gravity of the subprime mortgage market woes. Wednesday, King said BoE must function only as a lender of last resort. He said the current market turmoil was a passing phase, which did not call for drastic measures. The bank lent at a 1% higher rate of 6.75%.

Economic growth in the UK may be 1% lower in 2008 and 2009 as a result of the ongoing credit crunch. Rising interest rates have led to record levels of loan defaults and home repossessions. This has sparked fears about which lenders might be exposed to the bad debts. There has been also a slowdown in take-over activity, with banks less willing to lend money needed to complete deals. Concerns have been raised the credit crunch would spread to the real economy from financial services sector, with the retail and housing markets at the worst exposure.