[R]4:30PM New York, 10:30PM Frankfurt, 2:00 AM Mumbai[/R]

[R]Rise in oil and metals prices dominated trading in New York trading. Dollar fell to three-decade low against Canadian dollar and fell below $1.40 against euro.[/R]

Dow Jones Industrial Average fell 48.86 or 0.35% to 13,766.70, Nasdaq decreased 12.19 or 0.46% to 2,654.29, and S&P 500 declined 10.29 or 0.66% to 1,518.74.

FTSE 100 Index in London lost 31.00 or 0.48% to 6,429.00, in Tokyo markets surged to 16,413.79, up 0.20% or 32.25, and in Brazil, iBovespa Index traded lower 0.62% or 357.78 to 56,906.44.

Bond Yields gained on 10-year U.S. bonds to 4.68% and 30-year bond to close at 4.95%.

WTI Crude oil increased $1.39 to close at $83.32 per barrel, fifth record close in a row for a front month contract, natural gas closed down 17 cents to $6.008 per mBtu, and gasoline futures increased 4.17 cents to close at 213.51 cents per gallon.

Gold gained $10.40 in New York trading to close at $739.90 per ounce, silver closed 36 cents higher to close at $13.47 per ounce, and copper for front month delivery in London added $301.00 to $7,919.00 per pound.

Of the 30 stocks in Dow Jones Industrial Average, 20 closed lower, 9 closed higher, and one was unchanged. Home Depot led the decliners with a fall of 2.4% to $35.52 followed by 2.2% drop in Citigroup to $47.20, and 1.5% decline in Disney to $34.04. Boeing led the gainers with a rise of 1.2% to $101.25 followed by 1.1% increase in AT&T to $42.03, and 0.6% rise in Hewlett Packard to $50.10.

Of the stocks in S&P 500, 107 stocks closed higher and 391 fell, 2 closed unchanged. Nineteen stocks declined more than 4%. Circuit City fell 18% to $8.67 after reporting earnings and lowering outlook for the rest of the year. Followed by losses of 7% in DR Horton, 7% in Pulte Homes, and 6.6% in KB Home, and 5.9% in Masco Corp. Precision Capstone led the gainers with a rise of 5% followed by 3% in U.S. Steel, and 2.9% in National Oilwell.

In New York deals, dollar, earnings, and oil dominated news. Dollar reached to three decade low and reached a near parity against Canadian dollar. Dollar also fell against euro and broke through $1.40 level and fell to a nine-year low against Indian rupee. Traders were also unsettled by the speculation that Saudi Arabia may remove its dollar peg to its currency. Saudi Arabia has not followed through and lowered its interest rate after the Fed rate cut. Market is rife with the speculation that the peg is likely to be removed which Saudi government later in a day denied. The lack of statement from the Fed on dollar after the rate cut added to dollar’s weakness. Several traders have speculated that the dollar is likely to trade below $1.50 to a euro if the Fed does not change its course.
Commodities rose on the weakness in dollar, lifting agricultural products, metals, oil, and precious metals to elevated levels. Gold jumped 1.4% to $732 and oil increased and traded near $82 per barrel. Nickel led the metals surge with a rise of 10% followed by increase of 5% in zinc, 4% in copper, and 3.3% in aluminum.

Before the stock market opening, Goldman Sachs and Bear Stearns reported earnings. Goldman (GS: chart) earnings jumped 79% and that at Bear fell 61%. Third quarter earnings at Goldman jumped sharply on the mortgage bonds shorting and sharp rise in revenue in asset management and principal trading. Bear Stearns earnings declined on sharp losses in mortgage markets.

FedEx (FDX: chart) dropped after revising its outlook for the rest of the year but reported better than expected earnings. Carnival (CCL: chart) and ConAgra (CAG: chart) jumped after reporting better than expected earnings.

AthenaHealth jumped 97% in the public offering. The medical software company priced its initial public offering at $17.50 per share but closed at $35.50.

Borse Dubai and Nasdaq have entered into agreement in a 3-way to a deal that may have far reaching impact around the world. The landmark deal is likely to have global repercussions as exchanges consolidate. Borse Dubai will acquire OMX and sell the Swedish exchange to Nasdaq and acquire 19.9% stake in the U.S. exchange. The Nasdaq will sell 28% of its 31% stake in London Stock Exchange to OMX. However, rival bidder Qatar Investment Authority is considering a higher bid for OMX and said that it has acquired 20% stake in LSE.

In Latin Markets trading Argentina led the decliners with a fall of 0.76% followed by losses of 0.6% in Brazil and 0.09% in Mexico. Chile gained 1.5%. Of the 63 stocks in iBovespa index 18 gained, 43 lost, and 2 closed unchanged. TAM led the decliners with a loss of 4.8% followed by declines of 4% in Copel, and 3.9% in Duratex, and 3.6% in Tele Norte. Ljoas Renner led the gainers with a rise of 3.9% followed by increases of 2% in Light, and 1.6% in Embraer. Vale Rio Doce gained 1.4%.

[R]2:00PM New York, 7:00PM London - UK stocks tumbles as Northern Rock shares continue sliding. The Bank of England blames British and European banking laws for the banking crisis. Dollar declines in international trading.[/R]

London stock retreated to close lower 0.48% or 31 to 6,429.00. Northern Rock fell 27.9% after the U.K. Treasury said it would not take responsibility of new accounts deposits at the lender. UK will not protect any new accounts opened at the bank after the mid-night of Sept 19th and the protection guarantee excludes debts and other hybrid securities issued by the company.

Northern Rock closed at 185 pence with a total loss of 84% for the year. Stocks of some banks marginally advanced but future of Northern Rock is increasingly in unchartered territory.

Bank of England Governor Mervyn King has distance himself from failing to deal with banking crisis by saying the British and European Union laws restrained the London Bank to deal with the worst banking crisis since 1973. King extended 10 billion pounds in cask to banks, a reversal from his earlier position to avoid assisting banks in need of extra liquidity. A credit squeeze caused by the collapse of the subprime mortgage market in the U.S. forced Northern Rock to seek an emergency loan from the central bank last week. This culminated heavy withdrawals despite guarantees from the government that it will safeguard their savings.

The Office of National Statistics reported Thursday that retail sales in August increased 0.6% or 4.9% for the year largely driven by heavy discounts. Retail sales increased 0.7% in July and the increase in August sales was unexpected. The August sales increase was driven by 1.3% increase in food sales, 1.6% in clothing sales and at non-food sales increased 0.2%. Consumers in the UK are stretched with 1.3 trillion in consumer debt. Rising home values have allowed consumers to borrow against home equity and splurge into non-essential purchases. Rising interest rates have so far not crimped the consumer spending.

Borse Dubai and Nasdaq have entered into agreement in a 3-way to deal. The landmark deal is likely to have global repercussions as exchanges consolidate. Borse Dubai will acquire OMX and sell the Swedish exchange to Nasdaq and acquire 19.9% stake in the U.S. exchange. The Nasdaq will sell 28% of its 31% stake in London Stock Exchange to OMX. However, rival bidder Qatar Investment Authority is considering a higher bid for OMX and said that it has acquired 20% stake in LSE.