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

Market averages in New York fell at the opening and lost nearly 2.5% by the mid-day. In the late afternoon market rallied and recovered all the losses. And, S&P 500 managed to close up. UK lost 4.1%. Chile, Argentina, and Brazil fell the most. South Korea and Malaysia plunged 7%.

Dow Jones Industrial Average dropped 0.12% or 15.69 to 12,845.78, Nasdaq lost 0.32% or 7.76 to 2,451.07, and S & P 500 gained 0.32% or 4.56 to 1,411.26.

FTSE 100 Index in the U.K. closed down 250.40 or 4.1% to 5,858.90, in Tokyo Nikkei 225 closed at 16,148.49, down 1.99% or 327.12, and in Brazil, iBovespa Index near the market close traded down 3.81 to 47,409.45.

Yields edged lower on 10-year U.S. bonds and closed at 4.72% and 30-year bond rose to close at 5.02%.

Crude oil decreased $3.18 to close at $71.00 per barrel, natural gas closed up 1 cent to $6.875 per mBtu, and gasoline futures increased 3.5 cents to close at 197.83 cents per gallon.

Gold dropped $21.70 in New York trading at $658.00 per ounce, silver lost $1.06 to close at $11.50 per ounce, and copper futures declined $108.00 to close at $7,379.00 per metric ton.

In New York trading stocks fell at the opening and continued slide in the afternoon trading after attempting at least three times to rally the market. The last hour saw a rebound, lifting the averages to a fractional loss. The reversal in the market psychology was underpinned by the falling price of oil and program traders willingness to move in sectors that were deemed undervalued.

Bear Stearns fell as low as $101.23 before rebounding and closing at $116, up $13.29. Lehman Brothers declined to $49.06 before settling at $54.75, up $3.18. Merrill Lynch dropped to $66.94 but recovered to close at $71.13, up $2.19. Citigroup declined to $44.66 but closed up $1.94 to $47.55. The market turned in the last thirty minutes of trading and stocks in the banking, mortgage lending, and housing market rebounded sharply. Countrywide Financial dropped as low as $15 but managed to close at $18.95, down $2.34.

Lennar and Toll Brothers rebounded 3%. Beazer Homes, Pulte Homes, and D R Horton climbed back a fraction in the late afternoon rally.

Countrywide Financial dropped 24% before recovering to close 11% lower after the reports that it tapped its credit line of $11.5 billion. The company cited difficulties in raising funds in the normal securitization market. Freeport-McMoran fell 6% after dropping as much as 15%. Southern Copper based in Peru fell 4.5% but recovered from 9% on the news that earthquake in the country killed at least 330 people.

The U.S. Labor Department reported initial claims for the unemployment at the end of the August 11 increased 6,000 to 322,000. The seasonally adjusted increase was higher than expected by most economists. The continuing claims reported for more than a week increased 17,000 to 2.567 million as of August 4th. The

Housing starts decline 6.1% in July to a seasonally adjusted annual rate of 1.381 million, 21% decline from a year ago from the revised 2.1% jump in June to 1.47 million units. The housing starts reached a peak of 2.3 million unit annual rate in the February of 2006 and since the have steadily declined. Building permits declined 2.8% to 1.373 million annual rate. The fall in housing starts by the region was led by a decline of 11% in the South, 3.7% in the West, and 1.3% in the Northeast. Midwest starts increased 2.6%.

Of the 30 stocks in Dow Jones Industrial Average 17 closed lower and 13 advanced. Of the 30 stocks 9 declined more than 1% and 6 stocks gained more than 1%. Alcoa led the index stocks with a loss of 5.2% followed by 2.8% decline in Boeing and General Motors. Caterpillar dropped 2.6%, IBM lost 2.3%, and Home Depot dropped 2.2%. J P Morgan led the gainers in the index with a rise of 5.7% followed by 4% increase in Citigroup, and 2.7% in American Express. Disney and DuPont increased 2.3%.

Of the stocks in S&P 500, 354 stocks closed lower and 144 gained, 2 stock closed unchanged. Technology, mortgage lenders, industrials, steel, and energy stocks dominated the losers list. Countrywide led the stocks in the index for the third day in a row with a loss of 13% followed by 9% decline in Dynegy, and 8% decreases in Freeport-Mcmoran, Akamai, Precision Capstone, E*Trade, and CIT group. First Horizon led the gainers in the index with a rise of 8.3% followed by 7% increase in MBIA, Washington Mutual, and Fannie Mae. JP Morgan, US Bancorp, Bear Stearns, and Lehman Brothers increased between 4% and 5%.

Asian Markets were battered across the region as investors withdraw from markets. South Korea led the region with a loss of 6.93% followed sharp declines of 6.6% in Malaysia, 6% in Philippines, 5.94% in Indonesia, 4.5% in Taiwan and India, and more than 3% in Singapore, Taiwan and Hong Kong. Japan lost 2%.

In Tokyo trading Nikkei 225 lost 1.99% or 327.12 to 16,148.49 led by declines in industrial shares. Over 20 stocks in the index fell more than 4%. Out of the 225 shares in the index 196 fell, 25 gained and 4 traded unchanged.

In Latin Markets trading Argentina led the region with a sharp loss of 4.7% followed by Chile with a loss of 3.8%, 2.6% decline in Brazil, and 1.3% decrease in Mexico. Every member of the Brazil index of 60 stocks closed lower. Cyrela Commercia led the decliners in the index with a plunge of 18% follwed by its parent company decline of 10%. B2W Global, CCR, Ipiranga Petroleum, and TIM lost near 10%. Of the 60 stocks 27 stocks lost more than 5%.

7:00PM London, 2:00PM New York - London stocks fell in unprecedented sell-off amid deepening investor worries over continuing troubles in the US credit market. EU wants rating agencies probed.

Anxious investors exited equities enmasse, as investors worried of the exposure of British banks to troublesome U.S. mortgages. London plunged 4.1% with all 102 shares closed lower and 30 stocks fell by more than 5% while 67 shares dropped between 1% and 4.9%.