4:00PM NY – 10:00 PM Frankfurt – 2:30 AM Mumbai

Yield on 10-year U.S. bond closed at 4.497% and the 30-year bond closed at 4.615%.

Gold lost $1.20 to close at $633.60 a troy ounce, silver declined 1 cent to end at $14.015 a troy ounce and copper decreased 4.20 cents to close at 309.150 cents per pound.

Oil lost 37 cents to close at $60.85 a barrel and heating oil declined 0.23 cents to finish at 172.20 cents a gallon. Gasoline was up 0.37 cents to end at 160.250 cents a gallon. Natural gas advanced 0.3 cents to close at $7.430 per mBtu.

Asian markets ended mostly lower led by India with a decline of 3.02%, Taiwan with a decrease of 2.02% and South Korea with a loss of 0.99%. The advancers were Japan with an advance of 0.66%, Singapore with a gain of 0.23% and Australia with an increase of 0.01%. Japanese stocks increased, led by exporters and fishery stocks.

European markets finished mostly higher led by Switzerland with an advance of 0.88%, Netherlands with an increase of 0.62% and Belgium with a gain of 0.22%. The decliners were Spain with a decrease of 0.07%, U.K. with a loss of 0.06% and France with a decline of 0.01%. European stocks ended higher mainly for retailers hogged the limelight as hopes of strong Christmas sales powered the sector.

Latin America markets closed lower led by Brazil with a decline of 0.64%, Argentina and Canada both lost with 0.04%. The only advancer was Mexico with a gain of 0.28%.

2:30PM NY Fed left the Fed funds rate unchanged at 5.25%.

The Federal Reserve Bank left the short term rates unchanged at 5.25% as widely expected. Bond market had already factored rates to be unchanged and is looking for the Fed to lower rate by the second meeting in the year 2007. Former Dallas Fed President Robert McTeer said in a local TV interview that, “the next move of the Fed is likely to be down. There is a lot of inertia at Fed when it comes to policy making. Fed also has lot of help in fighting inflation from Internet, China, India and globalization.’’ Bond market rallied after the news and major averages bounced back from its low in the day.

1:00PM European markets finished down.
European stocks finished lower on Tuesday amid cautious trading before a Federal Reserve decision on interest rates. French drinks group Remy Cointreau and Belgian miner Umicore were among the few movers. Shares in Remy Cointreau hit a decade high of 48.70 euros or 5.4% after its first-half comparable champagne profit jumped 49%. The company has become a target of bid speculation since withdrawing from the Maxxium distribution pact. In deal news, shares of Belgium-based Umicore rose 5.3% after it agreed to combine its zinc smelting assets with Zinifex of Australia in a deal, expected to create the world's largest zinc maker. The German DAX 30 closed down 0.1%, dragged by semiconductors STMicroelectronics and Infineon Technologies. The French CAC 40 slipped 0.2%, with holiday group Club Mediterranee contributing to the losses, falling 2.5%. London FTSE 100 fell 0.2%, as consumer-price data wasn't as well received after it showed inflation accelerated to 2.7%, the highest level for a decade.


Crude oil prices advanced on possible output cut. Crude oil January contract added 17 cents to $61.39 a barrel. The U.S. dollar was mixed against its major currency rivals. The euro was quoted at $1.3245, down from $1.3259. The dollar bought 116.99 yen, up from 116.88. The British pound was quoted at $1.9673, up from $1.9587. European gold prices declined. In London, gold traded at $628.52 per troy ounce, down from $629.30. In Zurich, the precious metal traded at $626.20 per ounce, down from $627.93. Silver closed at $13.84, up from $13.79.


11:30AM Market averages posted modest weakness. Sabre agreed to be bought.
U.S. market averages posted modest weakness in a light trading session Tuesday, with investors cautious ahead of the Fed Reserve's decision on interest rates. Weak sales at Best Buy (BBY: chart) raised concerns of decreasing demand for electronics, sending the stock down 6%. Shares of Dow component Citigroup (C: chart) fell 1.6% after the investment bank named a new COO but indicated that there would not be any additional executive changes. Among other stocks in focus today, Texas Instruments (TI: chart) added 11 cents after the chipmaker slashed Q4 earnings and revenue guidance. Goldman Sachs (GS: chart) reported doubled Q4 earnings, beating Wall Street's forecast. The stock was slightly lower.

Travel distribution and technology firm Sabre Holdings (TSG: chart) was in the spotlight after it agreed Tuesday to be acquired by Silver Lake Partners and Texas Pacific Group in a $5 billion dollar private equity buyout, or for $32.75 a share in cash That price represents a 30% over Sabre's average closing price during the 60 trading days ended Dec. 8. The stock rose 4.6%. Among stocks driven by analyst comments, Cooper Companies (COO: chart), healthcare products maker, dropped 5.5% after Bear Stearns downgraded its rating on the company's stock to underperform from peer perform. On the other hand, shares of Alpharma (ALO: chart) rose 4% after Cowen & Co. upgraded its rating on the pharmaceutical company to neutral from underperform.

Airline stocks showed significant weakness in morning trading, with Continental (CAL: chart) turning in one of the airline sector's worst performances, down 6%. Some weakness emerged in the gold sector, caused by a decrease in the price of gold. Oil service and utility stocks helped to limit the downside for the broader markets. In late morning trading, the Dow Jones industrial average fell 13.46, or 0.11%, to 12,315.02. The Standard & Poor's 500 index slipped 0.14, or 0.01%, to 1,412.90, and the Nasdaq composite index fell 5.72, or 0.23%, to 2,437.14.


10:30AM The Sensex slipped Tuesday another 3% on selling of large-cap stocks.
The Sensex on BSE finished 404.41 points, or 3.02% lower, at 12,995.05. The market-breadth was very weak as there were five decliners for every gainer. Out of 2,625 stocks traded on BSE, 2,160 declined, 424 advanced and 41 were unchanged today. HDFC Bank was the only advancer from the 30-issue Sensex index. The turnover on BSE was Rs 4,913 crore, higher than Rs 4,830 crore on Monday. The turnover on NSE was Rs 11,085.28 crore, much higher than Rs 9,344.45 crore on Monday.

Economic news

Indian Index of Industrial Production, gauging the growth in output of manufacturing, power generation and mining, advanced 6.2% during the month much lower than 9.8% in the same month last fiscal year. Manufacturing rose at 6% in October from 10.9% a year ago. Growth in production of consumer goods, durables and non-durables almost halted.