[R]4:30 PM New York, 9:30 PM London, 6:30 AM Sydney – U.S. benchmark averages pulled back more than 1% as investors took cautious views. CIT Group, MBIA and AIG led the decliners with Bank of America and other banks closed lower. The Bank of Japan highlighted downside risk to the economy and left its rate unchanged.[/R]

The three popular U.S. stock market averages declined more than 1% as investors took cautious views on the further market gains. Financials led the decliners with MBIA and AIG down 13% and CIT Group plunged 19%. Market is still climbing wall of worries as investors look for pull backs.

MBIA Inc plunged after negative comments and a rating downgrade from JP Morgan. AIG dropped as well after the stock surged in the last ten days of trading. Yum! Brands, Sprint and Dynegy declined on lowered ratings from analysts. CIT delayed its regulatory filing.

Energy stocks declined after crude oil retrenched for the fourth session in a row and gold edged lower after it reached as high as $960 an ounce last week.

Investors are awaiting the U.S. Fed rate decision tomorrow afternoon and Japan left its key rate unchanged today. The Bank of England is expected offer its views on the economic growth tomorrow.

Germany reported first monthly decline in consumer prices in 22 years in June. The prices decreased 0.7% from a year ago and wholesale prices fell 10.6%. The pre-paid telecom operator Drillisch surged 7% after its net soared five-fold. TUI AG declined on financing worries related to Hapag-Lloyd.

UK home prices in June inched higher and number of agents reporting price decline also edged lower in July. Trade deficit widened in June as imports of goods rose at a faster pace than exports. Tata Motors arranged loans without the backing of UK government.

The Bank of Japan left its key rate unchanged in a unanimous vote and left its economic assessment unrevised. The central bank highlighted downside risks to the economy until the final demand improves. Insurers gained on earnings. Earthquake related stocks closed higher.

Stocks in Mumbai edged higher on positive market sentiment as several companies issued stock splits and reported new orders. Swine flu treatment related generic drug makers were on the most actively traded stocks. Tata Motors secured debt funding for its UK based Jaguar and Land Rover unit.

Australian stocks edged higher ahead of earnings from Commonwealth Bank and BHP Billiton. Weak gold prices failed to dampen the mood in trading as Chinese demand for iron ore and other metals is expected to rise. JB Hi-Fi surged after net profit rose 45%.

North American Markets

Dow Jones Industrial Average decreased 96.50 or 1.1% to a close of 9,241.45, S&P 500 Index fell 12.75 or 1.3% to 994.35, and Nasdaq Composite Index edged lower 22.51 or 1.1% to close at 1,969.73. Toronto TSX Composite Index decreased 164.20 or 1.5% to 10,629.47.

Of the stocks in S&P 500 index, 113 increased, 385 declined and 2 were unchanged.

AIG led the decliners in the S&P 500 index with a loss of 13.2% followed by losses in MBIA Inc of 12.7%, in Genworth Financial of 8.6%, in Zions Bancorp of 8.4% and in Harris Corp of 7.8%.

QLogic Corporation led gainers in the S&P 500 index with a rise of 8.3% followed by gains in Tellabs, Inc 4.3%, in Norfolk Southern of 2.8% and UnitedHealth Group of 2.8%.

South American Markets Indexes

Mexico Bolsa Index decreased 504.52 or 1.8% to 27,800.80. Brazil Bovespa Stock Index dropped 1,068.85 or 1.9% to 55,761.16.

Argentina Merval Index decreased 1.9%. Chile Stock Market Select index edged lower 0.9%, Peru Lima General Index fell 0.02% and Colombia IGBC General Index decreased 0.8%.

Europe Markets Review

In London FTSE 100 Index closed lower 50.86 or 1.08% to 4,671.34, in Paris CAC 40 Index decreased 48.36 or 1.38% to close at 3,456.18 and in Frankfurt DAX index lower 132.31 or 2.44% to close at 5,285.81. In Zurich trading SMI decreased 57.57 or 0.96% to close at 5,949.98.

Asian Markets Review