[R]10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – U.S., European and Asian markets fell sharply as crude oil price edged higher. Inflation worries drag stocks around the world.[/R]

Global Markets Update

U.S. stocks turned lower after April wholesale inflation rose. The rise in inflation put investors on the defensive. Crude oil price surged above $129 a barrel after comments from oil complex investor T Boone Pickens. His comments suggested that the crude oil price may reach $150 a barrel. European markets closed sharply lower led by a sharp fall in the UK and Sweden. Retailers including Home Depot, Saks, Target, Autozone and Staples reported weak earnings. Home Depot reported sharply lower earnings on 6.5% fall in same store sales, however, dry bulk goods ocean carrier DryShips revenue in the quarter jumped 62%. Smaller carrier, Excel Maritime yesterday reported 94% rise in revenue and 213% rise in earnings in the first quarter.

Crude oil in London traded at record high sparking fears of rising inflation in the region. Crude oil prices have risen nearly 30% in the last three months when valued in the U.S. dollar and nearly 18% in euro. The prediction of higher crude oil prices put investors on the defensive. Commodities related stocks fell after a broker encouraged investors to trade out of the sector for now. BHP Billiton, Rio Tinto and Antofagasta fell on profit taking.

European markets closed lower across the region led by a sharp decline in the UK and Swedish indexes. Crude oil prices reached another record above $129 a barrel, sparking fears of sustained inflation in the region. DAX 30 index in Germany and CAC 40 index in France dropped 1.5% and 1.7% respectively. German confidence fell on worries related to strong euro and rising inflation dominated the news. Auto sales in European markets rose nearly 10% in April.

Stocks in Japan declined on the worries that the current U.S. credit market malaise in the U.S. could drag earnings of Japanese companies. Nikkei 225 index fell 0.8% to 14,160. According to a report issued by the Ministry of Industry and Trade, demand for services in March rose 0.3% after a revised demand increase of 1.6% in February. The Bank of Japan left its key interest rate at 0.5% and said that corporate profits are leveling and economic growth is slowing on rising commodities prices.

European Markets indexes

In London FTSE 100 Index closed lower 184.90 or 2.90% to 6,191.60, in Paris CAC 40 Index decreased 87.22 or 1.70% to close at 5,054.88 and in Frankfurt DAX index lower 107.44 or 1.49% to close at 7,118.50. In Zurich trading SMI decreased 152.35 or 1.96% to close at 7,626.58.

Of the DAX 30 members, all stocks declined led by 7% fall in Infineon Technology to €6.65. Deutsche Boerse declined 4% or €4.15 to €100.40 euros, Deutsche Lufthansa AG lost 3.6% or €0.64 to €16.55. Thyssenkrupp AG fell 3.5% or €1.61 to €44.90 and Man AG was lower at 3.2% or €3.22 to €101.03.

Adidas AG fell 1.3% to €2.70. The company reported that its first quarter revenue climbed 3% to €2.621 billion from €2.538 billion in 2007.

The group said net income increased 32% to €169 million from €128 million last year driven by strong operating margin improvement and lower net financial expenses. Basic earnings per share rose 33% from a year earlier to €0.84 in 2008 up from €0.63 in 2007

Of the CAC 40 shares, Gaz De France led the gainers with a rise of 1.1% to €43.32. EDF gained 0.6% to €69.95 and Unibail Rodamco was higher at 1.4% to €169.

STMicroelectronics declined 4.9% to €8.17 euros, Air France lost 4.9% to €19.33 euros, EADS fell 4.3% or €4.85 euros, Alcatel declined 3.9% or €16.18 euros and ArcelorMittal declined 3.7% to €63.55.

North American Markets indexes

Dow Jones Industrial Average fell 199.48 or 1.53% to a close of 12,828.68, S&P 500 closed down 13.23 or 0.93% to 1,413.40, and Nasdaq Composite Index decreased 23.83 or 0.95% to close at 2,492.26. In Toronto TSX Composite closed up 63.14 or 0.42% to 15,047.34 in Friday’s trading.

Of the 30 stocks in Dow Jones Industrial Average, 2 closed higher, 28 closed lower, and none were unchanged.

Home Depot led the decliners in the Dow Jones Index with a fall of 5.6% followed by losses in JP Morgan of 4.5%, in General Motors of 4.5%, in Citigroup of 3.6% and in Verizon Communications of 3.4%. Chevron gained 0.9% and Hewlett Packard added 0.2%.

Of the stocks in S&P 500 index, 87 stocks increased, 413 declined, and none were unchanged. Of the stocks in the index, 57 stocks fell more than 3% and 4 gained more than 3%.

Micron Technology drop of 6.6% led the decliners in the S&P 500 index followed by losses in KB Home of 5.7%, in Home Depot of 5.6%, in Broadcom Corp of 5.5% and in Discover Financial of 5.52%. Humana led the gainers in the S&P 500 index with a rise of 6.3% followed by increases in SLM Corp of 4.45%, Range Resources rose 3.9% and Compuware added 3.3%.

South American Markets Indexes

Argentina and Chile led the gainers in the Latin American markets with a rise of 1.10% followed by increases in Brazil of 0.11%. Colombia led the decliners in the region with a loss of 0.9% followed by declines in Mexico of 0.85%, in Venezuela of 0.46% and in Peru of 0.22%.