5:00PM NY – 11:00 Frankfurt – 3:30AM Mumbai
U.S. trade deficit in November dropped 1% to $58.2 billion. However deficit in the month was at record level with European nations, China, Mexico and Canada. Oil price dropped 3% and a loss of 9% for the year. Emerging markets continued to decline but Venezuela rebounded.


Yield on 10-year U.S. bond closed unchanged at 4.680% and 30-year bond closed at 4.773%.

Gold lost $2.00 to close at $613.00 a troy ounce, silver decreased 14 cents to end at $12.455 a troy ounce and copper increased 11 cents to close at 266.60 cents per pound.

Oil lost $1.62 cents to close at $54.02 a barrel and heating oil declined 3.1 cents to finish at 152.55 cents a gallon. Natural gas increased 8.4 cents to close at $6.715 per mBtu. Gasoline went down 4.04 cents to end at 142.92 cents a gallon.

Asia markets closed lower led by Indonesia with a loss of 3.96%, Hong Kong with a decline of 1.66% and Singapore with a decrease of 1.57%. The only advancer was Thailand with an increase of 0.90%. Asian markets closed lower as resource stocks lost ground on falling commodities prices and Asian electronics makers suffered from Apple''s iPhone introduction.

Emerging markets have been on the decline since the beginning of the year on lower oil and metal prices and narrowing of gap on price to earnings multiple between exchanges of the industrialized nations. Thailand’s SET index has lost 8.5% since the beginning of the year.

European markets ended lower hurt by tech and telecom sectors, as well as losses in leading auto companies. The biggest decliner was Spain with a decrease of 1.37%, followed by Germany with a loss of 0.72% and the U.K. with a decline of 0.57%. There were no gainers. Russian markets fell 1.55%, a drop for the second day in a row.

Latin America markets finished mostly higher led by Argentina with a gain of 1.49%, Brazil with an increase of 0.78% and Mexico with an advance of 0.43%. Venezuelan stock market rebounded 5.6% after sinking 19% yesterday. The only decliner in the region was Canada with a loss of 0.10%.

1:00PM European markets closed down, pressured by weak tech and telecom stocks.
European stocks ended Wednesday trading session considerably lower, pressured by weakness in the tech and telecom sectors, as well as losses for leading auto companies such as Volkswagen. Nokia shares dropped 2.2% after Apple introduced its iPhone, raising investors’ worries that Apple’s cell phone could take from the market share of the Finnish mobile giant. Mobile phone operator Vodafone Group also fell 2.2% on news that the company has begun due diligence on the potential acquisition of Hutchison group''s 67% stake in Hutchison Essar Ltd. Again in the tech sector, STMicroelectronics limited the downward technology trend, rising 0.8% after Lehman Brothers upgraded the stock. Shares of chip maker Infineon Technologies also moved higher. The automotive sector also suffered weakness, as automaker Porsche slipped 0.5%, while Volkswagen shares declined 1.6% in Frankfurt. Among other movers today, French catering group Sodexho Alliance climbed 4.8% in Paris, while U.K. supermarket group William Morrison rose 6% on higher comparable sales. The German DAX 30 slipped 0.7%, the French CAC 40 fell 0.6%, and London FTSE 100 dropped 0.6%.

Crude oil prices hovered over $54 a barrel on a sharp rise in heating oil stocks. Crude oil February contract fell $1.27 to $54.35 a barrel. London Brent slipped $1.15 to $54.03. The U.S. dollar traded higher against its major currency rivals. The euro was quoted at $1.2942, down from $1.2999. The dollar bought 119.66 yen, up from 119.36. The British pound was quoted at $1.9334, down from $1.9398. European gold prices were mixed. In London, gold traded at $609.15 per troy ounce, up from $608.83. In Zurich, the precious metal traded at $606.40 per ounce, down from $606.55. Silver closed at $12.30, up from $12.26.


11:30AM Energy stocks weighed. Tech shares gained on Apple iPhone.
U.S. stock market averages traded down, pressured by further weakness in the oil and gas sector after a petroleum report showed larger-than-expected increases in U.S. gasoline and distillate inventories. ConocoPhillips (COP: chart) dropped 2.5% and Chevron Corp. (CVX: chart) slipped 1.7%. Chevron released a profit warning for the fourth quarter, blaming lower commodity prices. However, declines on the Dow were limited by sharp gains in Alcoa Inc. (AA: chart), which kicked-off the Q4 earnings reporting season by posting 60% profit jump, exceeding analyst estimates. Alcoa shares rose 4%.

On a positive note, tech stocks rose for a second day in a row, boosted by the introduction of Apple Inc.''s (AAPL: chart) new media-playing cell phone. Apple shares were up 4.6%, rising to an all-time intraday high after several brokerages raised their price targets on the stock. Shares of its tech rival Nokia (NOK: chart) slipped 2.4%. In late morning trading, the Dow Jones industrial average fell 24.35, or 0.20%, to 12,392.25. The Standard & Poor''s 500 index was down 2.85, or 0.20%, at 1,409.26, and the Nasdaq composite index was off 2.09, or 0.09%, at 2,144.74. Bonds fell following a report that the U.S. trade deficit narrowed in November. The yield on the benchmark 10-year Treasury note rose to 4.69% from 4.66% late Tuesday.

Wholesale inventories rose 1.3% in November.
The Department of Commerce released its report on wholesale trade in the month of November on Wednesday, showing that wholesale inventories increased by much more than economists had been expecting. The report showed that wholesale inventories rose 1.3 percent in November following a downwardly revised 0.4 percent increase in October. Economists had expected inventories to increase by 0.5 percent compared to the 0.8 percent increase originally reported for the previous month. The bigger than expected increase in wholesale inventories was partly due to a 2.8 percent increase in inventories of non-durable goods, which came amid a 13 percent increase in inventories of farm product raw materials. The report also showed that wholesales rebounded by 1.0 percent in November after falling 0.4 percent in October. The increase came as wholesale sales of durable goods rose 1.2 percent, while wholesale sales of non-durable goods rose 0.7 percent. Subsequently, the Commerce Department said that the inventories/sales ratio edged up to 1.20 in November from 1.19 in October. The ratio came in at 1.17 in November of 2005.


10:30AM NY – 9:30PM Mumbai The Sensex shed 1.5% in a fifth straight day of losses.
The Sensex on BSE finished 204.17 points, or 1.5%, lower at 13,362.16, the lowest close since December 20th, 2006. The market-breadth was weak as 1,699 shares declined on BSE, 942 rose and only 45 shares were unchanged. For every advancer, there were almost two decliners. Of the 30 stocks in the Sensex only two advanced, while the rest declined. The turnover on BSE was Rs 3,632 crore, lower than Rs 5,167 crore on Tuesday. On NSE, the turnover was Rs 8,572.23 crore, compared to Rs 8,806.52 crore on Tuesday.

Economic news

New York Stock Exchange will buy 20% of the National Stock Exchange of India, together with Goldman Sachs and other two other private equity funds for $490 million. The agreement was signed on Wednesday, valuing largest bourse in the country at about $2.5 billion. New York Stock Exchange is paying $115 million for the 5% stake, investment bank Goldman Sachs, private equity fund General Atlantic and Softbank Asian Infrastructure based in Japan to buy 5% stake each.

Indian Finance Ministry recently revised rules of investment in stock exchanges. Foreign investment in Indian Exchanges is limited to 5% by a single investor, to 26% as foreign direct investment and 23% by foreign institutions.