11:30AM Market averages traded lower. Financial stocks weighed.

U.S. market averages traded down in a volatile session, with credit markets and crude oil drawing attention. Continuous worries about rising interest rates, along with hedge-fund woes related to subprime mortgages, and rising crude oil prices, generated negative sentiment.

The heavily weighted financial sector declined on concerns that two hedge funds' losses on risky mortgage securities might not be contained. Among financial stocks, Merrill Lynch (MER) declined 2.4%, Barclays (BCS) lost 1.3%, and Citigroup (C) dropped 1.1%. Bear Stearns (BSC) lost 0.6%.

The main focus Friday was the IPO of private-equity firm the Blackstone Group. (BX), whose shares jumped 15%. The offering raised $4.13 billion early, ranking as the sixth richest IPO in U.S. In other corporate news, shares of contract electronics manufacturer Jabil Circuit (JBL), rose 11.8% after the company posted strong earnings late Thursday. Credit Suisse upgraded Jabil Circuit to outperform from neutral.

The Dow Jones industrial average was down 79.09 points, or 0.58%, at 13,466.75. The Standard & Poor's 500 was down 8.90 points, or 0.58 %, at 1,513.29. The Nasdaq Composite Index was down 14.32 points, or 0.55%, at 2,602.64.


9:45AM Wall Street opened lower amid rising oil prices and interest rate worries.

Wall Street opened in the negative on Friday, pressured by rising crude oil prices and renewed concerns about rising global interest rates. Light, sweet crude rose 48 cents to $69.13 per barrel on the Nymex. Rate-sensitive housing stocks posted weakness, with Champion Enterprises (CHB) and Meritage Homes (MTH) falling about 2%.

Blackstone Group (BX) was in the spotlight after its IPO raised $4.13 billion, pricing at the top of its estimated range as the sixth richest IPO in U.S. history. Company’s stock tumbled 18%.

Among tech stocks, eBay (EBAY) gained 3.7% amid reports that it is planning to return to the Chinese auction market this summer. In corporate news, Jabil Circuit (JBL) climbed 10.3% after its Q3 profit exceeded analyst estimate. Cognos (COGN), a software maker and technology consultant, forecast a Q2 profit that fell short of expectations. The stock fell 4.7%.

In the retail sector, Abercrombie & Fitch (ANF) declined 2.7% after Lehman Brothers downgraded its rating on the stock to equal weight from overweight. In the first hour of trading, the Dow Jones industrial average fell 56.09, or 0.41%, to 13,489.75. The Standard & Poor''s 500 index fell 7.14, or 0.47%, to 1,515.05, and the Nasdaq composite index fell 7.48, or 0.29%, to 2,609.48. Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 5.21% from 5.20% late Thursday.


9:30AM The FTSE 100 is lower Friday on weaker banking stocks.

By mid-day, the FTSE 100 was trading 20 points lower at 6,576.0, a decline of 0.3%.

Advancers

The retail sector was upbeat after a week of selling tracking poor trading updates from Tesco and J Sainsbury. Tesco led the gainers by midday, recovering 2.9%. William Morrison gianed 2.3%. Home Retail Group, the owner of Argos, gained 1.4% and Kingfisher, the company responsible for the B&Q home improvement chain, gained 1.2%.

Pearson, the media company, gained 2.3%, as investors cheered the company’s decision not to join GE to counter New Corp’s bid for Dow Jones.

BAE Systems, defence contractor, advanced 2.4% after a review of its planned acquisition of Armor Holdings of the US was approved by the US Treasury Department.

Decliners

Banks with exposure to the U.S. market dampened the overall market sentiment. Barclays declined 1% after it admitted it had some exposure to the two Bear Stearns funds though it added losses were immaterial. Fund manager Schrader’s was the worst hit, down 1.7%, on its large US exposure.