3:00 PM New York – U.S. stocks fell in New York after the index of existing home sales fell to a seven-year low.

US home sales fell to a record low on Tuesday. Gold retreated from all time highs.

In the early afternoon trading Dow Jones Industrial Average declined 0.25%, and S&P 500 fell 0.12%, but Nasdaq rose 0.1%.

Of the thirty stocks in Dow Jones 13 traded higher, 17 declined and none were unchanged. Of the stocks in S&P 500 index 191 gained, 306 fell, and 3 were unchanged.

Smith International led the decliners in the S&P 500 index with a fall of 3.9% followed by Hess Corporation with a decline of 3.9%, and Hershey with a fall of 3.7%. Ciena led the gainers with a rise of 8.3% to $42.43 among index stocks.

The index of existing home sales fell to the lowest level since January 2001 but housing industry related stocks were on the rise. D R Horton, Lennar, and Pulte Homes jumped 7%. MGIC Investment traded up 5%. Recently priced IPO of Duff & Phelps jumped 30 cents to $18.61.

Morgan Stanley (MS: chart) said today that it plans to eliminate 600 jobs and restructure its mortgage business. The company will consolidate its subprime and prime lending and mortgage buying unit into one group. After the news the stock jumped $2.41 to $66.42.

The leveraged buyout group led by J C Flowers & Company cut its offer price for the student lender Sallie Mae to $21 billion from $25 billion. The lower offer reflects current credit market condition and a new law signed last week. The offer is revised lower from $60 per share to $50 and has performance payment of between $7 and $10 per share.

Earlier Sallie Mae had said that the new law will reduce the core earnings between 1.8% and 2.1% every year for the next five years.

Energy stocks fell on the decline in crude oil price. The price of November delivery dropped 24 cents to $80 per barrel and gold fell $17.80 to $736.30 per ounce. Exxon Mobil, Conoco Phillips, Chevron, Tesoro, and Valero fell on weak trading in oil.

Dollar firmed against pound, yen, euro, Canadian dollar, and other Asian currencies.

European markets closed fractionally higher but Asian markets closed higher led by a sharp rise in Hong Kong.

10:30AM New York – Stocks in New York edged lower after a day of sharp gains. Asian markets rallied. Commerce Bancorp has agreed to be acquired by Toronto Dominion Bank.

Stocks in New York inched higher after deal news, home sales index report, surging markets in Asia, and firm indexes in European trading.

Dow Jones Industrial Average is trading lower by 24.71 to 14,061.62, Nasdaq index is down 3.66 to 2,737.33, and S&P 500 index is on the decline by 4.37 to 1,542.67.

Toronto Dominion Bank has agreed to pay $8.5 billion for Commerce Bancorp (CBH: chart). The offer price includes 75% of stock of Toronto Dominion and 25% cash. The acquisition will increase its branch network in the U.S to 2,100 and will be ranked seventh in the number of branches ahead of Sun Trust and Regions Bank.

The deal priced at $42 per share or $8.5 billion is expected to generate cost savings of $310 million. The offer is priced at 22.5 multiple of fiscal 2008 earnings or 2.96 times book value, and premium of 13.5% to core deposits level. The deal is expected to close around April of 2008.

The acquisition is expected to lower the earnings at TD Bank by 10 cents to $6.05 and earnings estimate of 2009 of $6.80 are not expected to be hurt.

Citigroup also agreed to buy 32% of the remaining stake in Japanese securities broker Nikko Cordial for $4.6 billion.

Rising metal prices have kept consolidation in high gear among metal processors. Steel Dynamics (STLD: chart) will acquire all of the outstanding stock of OmniSource Corporation in a transaction valued at slightly more than $1 billion. OmniSource shareholders will receive 9.7 million shares of Steel Dynamics stock and $425 million in cash. The aggregate transaction value includes the assumption by SDI of certain liabilities, including net debt, which is expected to be approximately $210 million at closing.