[R]4:00PM NY and 10PM Frankfurt[/R]
Fed Chairman’s commented that housing market is undergoing ‘substantial correction.’ Market took it as a sign that Fed is unlikely to raise interest rates in coming weeks.

Yield on 10-year bond closed at 4.57% and the 30-year bond closed at 4.72%.

Gold dropped $14.80 to at $566.70 and Silver lost 25 cents to close at $10.795 while copper dropped 7.70 to close at $3.21.

Oil rose by 67 cents a barrel to close at $59.35 and natural gas increased by 37 cents to close at $6.12 per mBtu.

Asian markets closed mostly lower led by a decrease of 1.62% in S. Korea, a drop of 1.41% in Philippines and a decline of 1.31%in India. The few advancers were led by Thailand with an increase of 0.90%.

European markets finished higher due to a rally in Vodafone Group, climbing bank stocks, and seven-month lows for oil. The advancers were led by an increase of 0.95% in Spain followed by a gain of 0.90% in Germany while France ended 0.70% higher.

Latin America markets closed higher led by an increase of 3.53% in Brazil and a lift of 2.20% in Mexico, 1.4% in Chile and 0.9% in Argentina. Rise of 1.5% in Petrobras and in local bank and telecom stocks supported a surge in Brazil market. Canada closed 0.8% higher.

[R]12:30PM European shares closed notably higher.[/R]
European markets reversed from Tuesday’s decline to close notably higher. The upward move was brought by a strong rally in Vodafone shares and higher banking stocks which together with seven-month low crude oil prices counteracted a profit warning and losses for EADS. London FTSE 100 climbed 0.5%, boosted by Vodafone, up 4.1% after a well-received investor presentation, and strength from banks including Bradford & Bingley, Barclays and Lloyds TSB. These gains helped offset weakness in the oil and metals sectors, with BHP BIlliton, down 4.8%.

Lower crude oil supported travel stocks like British Airways and cruise operator Carnival, but dragged down energy shares like Royal Dutch Shell. Among other regional gainers, the German DAX 30 rose 0.9%, and the French CAC 40 advanced 0.7%, despite shares of EADS falling down 4.2% amid another delay of the A380 super-jumbo jet.

Oil prices dropped for a third day in a row on strong fuel supplies and expectations the OPEC will maintain production levels. Light sweet crude November delivery lost 68 cents to $58. Heating oil added 1.5 cents to $1.6684 a gallon, while gasoline rose by 2 cents to $1.4780. Natural gas futures rose 14 cents to $5.900 per 1,000 cubic feet. The U.S. dollar advanced versus major currencies. The euro traded at $1.2688, down from $1.2727. The dollar bought 118.03 yen, up from 117.89. The British pound stood at $1.8844, down from $1.8872. European gold extended recent decline. In London the precious metal traded at $561.60, down from $581.80 per ounce. In Zurich gold traded at $568.25, down from $582.0. Silver closed at $10.50, down from $11.

[R]11:30AM Market turned higher on weaker economic data.[/R]
The Dow hit an all-time intraday high, as stocks recovered Wednesday after a weaker-than-expected data on business activity helped ease concerns about inflation and interest-rate hikes. The ISM's services sector index slipped to a weaker-than-expected 52.9 in September from 57.0 in August. A government report surprisingly showed a rise in crude oil inventories, sending light sweet crude down 79 cents to $57.89 a barrel.

The Dow was boosted by a 3.4% gain by General Motors (GM: chart), with the auto maker moving higher after Bear Stearns upgraded its rating on the stock to Peer Perform from Underperform. Gains by IBM (IBM: chart), up 1.3% and Microsoft (MSFT: chart), up 1.3%, also helped the blue chip index higher.

In late morning trading Wednesday, the Dow rose 57.87, or 2.17%, to 11,785.21. The blue chips traded up to 11,786.49; that is now its all-time high. The Standard & Poor's 500 index was up 2.31, or 0.17%, at 1,336.42 and the Nasdaq composite index rose 14.33, or 0.64%, at 2,257.98. Bonds rose sharply, with the yield on the benchmark 10-year Treasury note falling to 4.51% from 4.62% late Tuesday.

[R]Crude and gasoline supplies rose.[/R]
Crude oil inventories climbed in the most recent week, according to government statistics released Wednesday. This broke a recent streak of declines. Meanwhile, gasoline stockpiles also saw an increase in the week, continuing a recent string of gains. The Department of Energy's Energy Information Administration said that crude oil inventories rose 3.3 million barrels in the week ended September 29. Specifically, the measure rose to 328.1 million barrels from the previous week's level of 324.8 million barrels. This followed a draw down of 100,000 barrels posted in the previous week.

Oil inventories for the September 29 week were 6.7% higher than last year. Meanwhile, gasoline inventories showed a week-over-week increase 1.2 million barrels. This added to a recent string of gains. In the previous week, gasoline stockpiles rose by 6.3 barrels. The level of gasoline inventories was 9.6% above last year. Distillate fuel oil had an inventory increase of 200,000 barrels for the week ended September 29. This followed an advance of 2.6 million barrels reported in the previous week.

[R]New factory orders slipped in August.[/R]
Wednesday morning, the Department of Commerce released its report on new orders for manufactured goods in the month of August. The report showed that orders fell less than economists had expected. The report showed that new orders for manufactured goods fell slightly to $403.60 billion in August from $403.63 billion in July. The modest decrease came after orders fell 1.0 percent in the previous month. Economists had been expecting orders to fall 0.2 percent. The modest decrease in factory orders came as new orders for durable goods and new orders for non-durable goods both fell slightly but came in nearly unchanged.

The drop in durable goods orders was revised from the previously published 0.5 percent decrease. The report also showed that shipments of manufactured goods rose 1.1 percent in August following a 0.1 percent decrease in July. At the same time, inventories of manufactured goods rose 0.4 percent in August after rising 0.8 percent in July. Subsequently, the inventories-to-shipments ratio came in at 1.17 in August, unchanged from the previous month.

[R]Business activity slowed in September.[/R]
The Institute for Supply Management released its report on business activity in the service sector in the month of September on Wednesday, showing that the pace of growth in the sector slowed more than economists had been expecting. The report showed that the index of activity in the sector fell to 52.9 in September from 57.0 in August. While a reading above 50 indicates growth in the sector, economists had been expecting a more modest decline to a reading of 56.0. The slowdown in the pace of growth in the sector came in spite of acceleration in the pace of new orders growth, with the new orders index rising to 57.2 in September from 52.1 in August. The pace of employment expansion also accelerated in September, with the employment index rising to 53.6 from 51.4 in the previous month. The report also showed a notable deceleration in the pace of price growth, as the prices index fell to 56.7 in September from 72.4 in August.


[R]10:30AM The Sensex sheds 162 points Wednesday in volatile trading.[/R]
Sensex on BSE lost 162.38 points, or 1.3%, to close at 12,204.01. The market-breadth was weak tracking a sharp decline in blue-chips. For 1,421 shares that declined, 1,039 rose and 67 shares remained unchanged. Decliners outpaced advancers by 4 to 1. The turnover on BSE was Rs 3,416 crore, compared to Tuesday Rs 3,092 crore. The turnover on NSE was Rs 7,284.91 crore.