4:00PM New York, 10:00PM Frankfurt, 1:30 AM Mumbai – New York markets were in the free fall in the last hour of trading. Credit watch on Bear Stearns prompted market fears in financial stocks and dragged housing, financials, and real estate companies. European markets closed lower. Emerging Markets in Latin America fell sharply. Asia closed higher in the overnight trading.

Dow Jones closed up 99.50 to 13,461.87, Nasdaq advanced 22.11 to 2,575.98, and S&P 500 increased 6.33 to 1,472.15.

FTSE 100 Index in the U.K. closed down 76 to 6,224.30, in Tokyo Nikkei 225 closed at 16,979.86, down 4.25, and in Brazil, iBovespa plunged 2,043.18 or 3.3% to close at 52,647.74.

Yields edged lower on 10-year U.S. bonds and closed at 4.73% and 30-year bond rose to close at 4.88%.

Crude oil decreased $1.45 to close at $75.41 per barrel, natural gas closed 1 cent lower to $6.10 per mBtu, and gasoline futures decreased 0.97 cents to close at 202.65 cents per gallon.

Gold traded higher $9.80 to close at $686.40 per ounce, silver down 16 cents to close at $13.15 per ounce, and copper futures gained $10 to close at $7,988 per metric ton.

In New York trading last hour trading amplified the earlier declines in the averages. The market averages were in the free fall in the last twenty minutes of trading and closed at the lows of the day.

Payroll in the month of July rose 92,000 and the growth in the payroll slowed, down from 126,000 in June, and 188,000 in May. The slow growth is payroll addition was also followed by stagnant wages. The average hourly wages increased 6 cents to $17.45, 3.9% hike from a year ago. While the headline number looks smaller but when compounded over ten years the impact on inflation can be severe.

A warning from at least one of the leading rating agency, on Bear Stearns credit watch with a negative outlook, fueled credit worries in the afternoon trading. Bear Stearns fell 6% and dragged other bond market related companies with it. Lehman Brothers fell 7%, followed by 5% loss in American Express, MasterCard with a decline of 8%, Goldman Sachs with a loss of 4.25%, and Merrill Lynch declined 3.5%.

Home Builders came under pressure as well. DR Horton and KB Homes lost 5% but Toll Brothers fell 6% and Beazer Homes USA fell 13%. Commercial realtors CB Richard Ellis (CBG: chart) plunged 9% and Jones Lang LaSalle (JLL: chart) fell 5%. Countrywide Financial (CFC: chart) fell 7% and insurance company CIT dropped 5%.

Asian markets closed higher in the region on the bank of rising indexes in New York and European trading. Shanghai led the regions gainers for the second day with a rise of 3.5% followed by a gain of 1.2% in South Korea and Taiwan, 1% rise in India and Thailand. Hong Kong added 0.4% and Australia edged a fraction higher. Philippines led the decliners in the region with a loss of 0.2% followed by fractional losses in Japan and Indonesia.

Latin American Markets plunged across the region led by 3.7%% fall in Brazil, 2.4% decline in Mexico, 1.8% loss in Argentina, and 0.9% drop in Chile.

In Sao Paolo trading only 3 of the 59 stocks managed to gain and rest of the others declined. Telephone operators TIM lost 8% and Brasil Telecom by 6%. Souza Cruz dropped 7%. Petrobras, CVRD, Lojas Renner, and Votorantim declined 4%.

1:00PM NY, 5:00 PM Frankfurt European markets dropped, pressured by U.S. economy fears.

European stock markets closed in the negative territory, pressured by fears of slowing U.S. economy amid a weaker-than-expected jobs data. The economy-related concerns offset the positive sentiment generated by strong earnings reports from companies like British Airways. France led decliners with a 1.5% drop, followed by Germany, losing 1.3% and the U.K. falling 1.2%.

In Frankfurt BMW and Philips fell, due to the U.S. economy concerns. The world's largest luxury carmaker slipped 2% as it makes 25% of its sales in North America. Philips lost 1.1% as the maker of electric shavers makes 28% of its revenue in the U.S.

In Paris oil company Total declined 1.2% for a third day as Citigroup cut its rating on the oil and gas industry. EDF, the country's biggest utility company, lost 1.3%, while Suez declined 0.8%. Among other movers, Linedata Services, a designer of financial software, slumped 13% on quarterly earnings.

In London energy stocks showed a notable decline. Royal Dutch Shell slid 1.6%, while BP, the region's second-largest oil company, fell 1.5%. Gas producer BG Group lost 2.52%, while BP slid 1.51%. British Airways shares fell 0.3%. The airline carrier reported a 75% jump in Q1 profit to 269 million pounds from 154 million pounds, although revenue fell 2% to 2.19 billion pounds.


11:30AM Market averages moved steeply down, led by financial and broker stocks.