[R]11:30AM Market averages dropped further lower, pressured by economic growth concerns.[/R]

U.S. stock averages moved further to the downside amid concerns about the economic growth, sparked by signs of growing weakness in the housing sector. A notable decrease in crude oil prices also generated negative market sentiment, sending energy stocks down. Exxon (XOM: chart) declined 0.8%, while shares of oil giant Chevron (CVX: chart) dropped 0.6%.

Utilities stocks were also notable decliners after last-week strong performance. Shares of big manufacturers, banks and other financial services companies posted the heaviest losses. 3M Co (MMM: chart) declined 1.1%, General Electric Co (GE: chart) lost 0.9%, while shares of Boeing Co (BA: chart) fell 0.7%.

Among financials, shares of the biggest U.S. mortgage lender, Countrywide Financial Corp (CFC: chart), dropped 4.8% after Lehman Brothers downgraded its stock. JPMorgan (JPM: chart) dropped 1.3%, whereas Citigroup (C: chart) slipped 0.9%.

Housing stocks came under pressure, following the release of a report on existing home sales, which showed a modest decline in sales, 0.2%, and a significant increase in inventories of unsold homes. The National Association of Realtors said that inventories of unsold single-family homes climbed 2.2% to 3.85 million in July, sending the inventory in relation to sales to the highest level in 16 years.

Shares of home improvement retailer Home Depot (HD: chart) rose 1.8% on news that agreed to sell off its wholesale-supply unit for $8.5 B, which is $1.8 B less than previously planned.

Tech stocks were given a boost by deal news in the sector. Shares of personal-computer maker Gateway (GTW: chart) skyrocketted 48% after Taiwan's Acer agreed to buy the company for 710 million, or $1.90 a share, a 57% premium to Friday's closing price. On the side of the losers, Apple (APPL: chart) dropped 1.8% and EMC Corp. (EMC: chart) slipped 2.1%.

In late morning trading, the Dow fell 52.59, or 0.39%, to 13,326.28. The Standard & Poor's 500 index fell 9.64, or 0.65%, to 1,948.69, and the Nasdaq composite index fell 15.06, or 0.58%, to 2,561.63. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.60% from 4.62% late Friday.

[R]Existing-home sales fell 0.2% in July.[/R]

Monday morning, the National Association of Realtors released its report on existing home sales in the month of July, showing that existing home sales fell modestly compared to an upwardly revised reading for the previous month. The report showed that existing home sales edged down 0.2 percent to an annual rate of 5.75 million units in July from an upwardly revised pace of 5.76 million units in June. With the decrease, existing home sales were down 9.0 percent year-over-year. Economists had been expecting existing home sales to fall to a 5.70 million unit rate compared to the 5.75 million unit rate originally reported for the previous month.

The modest decrease in existing home sales was due in large part to a 2.2 percent drop in sales in the Midwest, which was partly offset by a 1.8 percent increase in sales in the West and a 1.0 percent increase in sales in the Northeast. The report also showed that the national median existing-home price for all housing types was $228,900 in July. The median price was down 0.6 percent from July of 2006, when the median was $230,200, the highest monthly price on record. NAR added that total housing inventory rose 5.1 percent to 4.59 million existing homes available for sale at the end of July. This represents a 9.6-month supply at the current sales pace, up from an upwardly revised 9.1-month supply in June.


[R]11:00AM New York, 8:30PM Mumbai – Traders in Mumbai focused on local news and lifted the index.[/R]

Sensex soared 2.89% or 417.51 to 14,842.38 after sharp rise in Asian market. In Mumbai, as in the rest of Asia, indexes rebounded on the optimism sparked by the housing report in the U.S. Weak credit markets in the U.S. led to volatility in the global markets and sharp declines in market averages around the world. CNX Nifty advanced 112.45 or 2.68% to 4,302.60.

Of the stocks traded on the Bombay Stock Exchange, 2,050 stocks gained, 629 declined, and 54 were unchanged. Daily turnover declined to 3,489 crore rupees from 3,632 crore rupees. The turnover on the NSE rose to 8,896 crore rupees from 8,133 crore rupees. Of the 30 stocks in the index 28 gained and two stocks declined.


Offerings

The initial public offering of Take Solutions jumped 27% to 926 rupees from its price of 730 rupees. The 57 times oversubscribed IPO opened at 876 rupees and quickly reached its high for the day to 943 rupees.

Mecator Lines increased 2.3% to 54.75 rupees on the news that it plans to sell 30% stake in its Singapore subsidiary.

Gainers