U.S. market averages continued to trade lower, pressured by worries about U.S. home loans and the credit market. Record-high oil prices and data on housing and manufacturing also weighed. Oil prices hit a record high Wednesday after the weekly petroleum report. Light, sweet crude for September delivery rose 24 cents to $78.45 a barrel.

The housing and financial sectors posted the most notable losses. Bear Stearns (BSC: chart) fell 3% on reports it will face big losses in a third fund with about $900 million in mortgage investments. At the same time, the natural gas sector advanced, benefiting from a higher natural gas price. Utility and defense stocks posted modest gains.

On Wednesday, auto makers reported July sales. DaimlerChrysler (DCX: chart) posted a 9.1% decline in July U.S. sales to 156,314 vehicles despite a strong showing in Chrysler cars. Chrysler posted an 8%, even as car sales surged 32% on the back of the Sebring sedan. Mercedes reported a 14% drop to 18,586 cars and trucks.

In earnings news, Arcelor Mittal (MT: chart) posted a $2.72 billion profit in Q2, compares with earnings of $1.82 billion last year. Time Warner (TWX: chart) reported a 5% profit rise in Q2 on 6% revenue increase. The conglomerate earned 28 cents per share, up from 24 cents per share a year ago. Despite the positive results, Time Warner shares fell 4%. Whole Foods Market (WFMI: chart) rose 9% after reporting a smaller but better-than-expected Q3 results.

In late morning trading, the Dow rose 7.96, or 0.06%, to 13,219.95 after being up as much as 75 points earlier. The Standard & Poor''s 500 index fell 1.24, or 0.09%, to 1,454.03, and the Nasdaq composite index fell 13.10, or 0.51%, to 2,533.17. Bonds showed little movement. The yield on the benchmark 10-year Treasury note remained flat at 4.75% from late Tuesday.

ISM index declined to 53.8% in July.

Wednesday morning, the Institute for Supply Management released its report on business activity in the manufacturing sector in the month of July, showing that the pace of growth in the sector slowed much more than economists had expected. The ISM said that its purchasing manager''s index fell to 53.8 in July from 56.0 in June, although a reading above 50 still indicates growth in the sector. Economists had been expecting a more modest decline to a reading of 55.5.

The bigger than expected slowdown in the pace of growth was largely due to a significant slowdown in the pace of production growth, as the production index fell to 55.6 in July from 62.9 in the previous month. The report also showed slowdowns in the pace of new orders and employment growth. The new orders index fell to 57.5 in July from 60.3 in June, while the employment index fell to 50.2 from 51.1. The pace of price growth also slowed compared to the previous month, although it remained at an elevated level, with the prices index at 65.0 in July compared to 68.0 in June.


10:00AM New York, 7:30PM Mumbai – Sensex plunged to its third worst one day loss on near 4% sell-off in Asia.

Sensex in Mumbai trading plunged 615.22 or 3.96% to 14,935.77 level. Other indexes in the region fell between 4% and 3% during the session. Taiwan, Korea, and India led the decliners in the region. Stock trading in the session jumped to 6,267 crore rupees from 5,298 crore rupees a day ago.

In the broader market 2,147 stocks declined, 533 advanced, 41 were unchanged.

Among Sensex stocks ACC cratered 9.6% to 958 rupees on heavy volume. Reliance Energy lost 7% and Manhindra & Mahindra declined 4.8%.

Tata Motors dropped 4.65% to 666.80 rupees. Bajaj Motors lost 2.8% to 2,295 on the news that July sales dropped 7% from a year ago to 185,890 units. Maruti Suzuki India reported 18% rise in July sales to 52,839

Hindalco Industries lost 6.4% to 159 rupees after the company reported first quarter proft of 602 crore rupees, flat from a year ago and on revenue gain of 9%. The company sold 4,677.9 crore rupees of metal and metal products in the quarter.

Real estate stocks, subject of market speculation saw some air off the market valuations. Indiabulls Real Estate and Orbit Corporation plunged 9%, Unitech declined 7.3%, DLF lost 4%, and Mahindra Gesco fell 5%.

Consumer sector stocks that are supposed to withstand this kind of market declines fell as well. Hindustan Lever dropped 2.5%, Cipla fell 3%, ITC lost 2.2%.

Bank stocks fell a day after the Reserve Bank of India hiked the reserve ratio for bank deposits to 7%. Union Bank fell 9%, Bank of India lost 8%, and Allahabad Bank fell 6.5%.

Everonn Systems prices 4 million (40 lakhs) stocks at 245 rupees. The initial public offering jumped to 560 rupees before closing at 478.50 rupees with a premium of 242%. The offering was oversubscribed by 131 times propelling the stocks in the stratospheric level.

Jai Corp board of directors approved the foreign investor limit to 49% and agreed to split stock.