[R]4:15PM NY – 10:30PM Frankfurt – 3:00AM Mumbai[/R]

- Yield on 10-year U.S. bond closed at 4.62% and 30-year bond closed at 4.72%.

-Crude Oil closed $2.72 or 4.66% lower to close at $55.60 per barrel and natural gas closed up 1.4 cents to $6.17 per mBTU.

-Gold dropped 1.3% or $8.10 per ounce, silver rose 9 cents to close at $12.71 and copper dropped 4.4 cents to close at $2.606 per pound. Sharp decline in metals prices affected trading several emerging markets including Russia, Indonesia, Peru and Brazil.

-Asian Markets closed lower across the region led by 1.9% in Hong Kong, 1.7% in Thailand, 1.1% in India and Australia. Singapore and Indonesia lost 0.5% and South Korea lost 0.8%.

-European Markets closed lower across the region on the weakness in mining, banking and energy stocks. Norway lost 2.4%, France dropped 0.65% and the U.K. lost 0.5%. Germany and the Netherlands lost 0.25% but Spain and Switzerland managed to gain 0.05%.

-Latin American Markets closed lower led by 1.2% decline in Argentina, 0.9% loss in Brazil and 0.2% fall in Mexico. Chile closed 0.5% higher.


[R]2:30PM NY – Retail stocks gained on lower oil price and mixed same store sales report.[/R]
Same store retail sales for December was reported by 51 companies according to International Council of Shopping Centers Survey. Of the reporting companies only 23 managed to beat the expectations, 25 missed the expectations and three matched estimates. Luxury retailers reported better than expected sales. Saks reported sales growth of 11%, Nordstrom registered a gain of 9%. J.C. Penney (JCP: chart) reported a sales gain of 2.6% and Federated Department (FD: chart) registered a rise of 4.4% in sales during the last month.

During the late afternoon trading retail stocks registered gains on lower crude oil price. In New York trading, crude oil dipped 3% or $1.50 to $56.82 per barrel on higher than expected weekly inventory. Nordstrom (JWN: chart) is up $1.10 to $52.49 and Guess (GES: chart) is up $2.86.

[R]1:00PM European markets closed down, dragged by miners and oil majors.[/R]
European stocks closed down Thursday amid uncertainty related to inflation and economic growth after minutes from the Federal Reserve''s latest monetary-policy meeting. Miners were among the heaviest decliners, with BHP Billiton, and Rio Tinto falling more than 3.5% as copper prices continued to decline. Oil companies like Royal Dutch Shell and Total fell 1.2% amid a sharp decline by the oil price. Brokers also weighed. HSBC Holdings fell 1% in London after ABN Amro downgraded the banking group to sell from hold. ABB shares fell 3% in Switzerland after it was downgraded by Prudential Equity Group, citing valuation. Among other movers of the day, shares of German chemicals and pharmaceutical company Merck KGaA rose 6.5% after a report that it may sell its generic-drugs division in a deal of over 4 billion euros. The French CAC 40 was the biggest decliner, falling 0.7%, followed by London FTSE 100, down 0.5%, and the German DAX 30, down 0.3%.

Crude oil prices slipped below $57 a barrel on ample supplies. Crude oil February contract tumbled $1.49 to $56.83 a barrel. London Brent slipped $1.65 to $56.31 The U.S. dollar advanced against its major currency rivals. The euro was quoted at $1.3083, down from $1.3165. The dollar bought 119.34 yen, down from 119.35. The British pound was quoted at $1.9433, down from $1.9505. European gold prices declined. In London, gold traded at $627.10 per troy ounce, down from $635.25. In Zurich, the precious metal traded at $626.65 per ounce, down from $635.90. Silver closed at $12.74, down from $12.88.


[R]11:30AM The Nasdaq moved higher, helped by semiconductors.[/R]
The U.S. stock markets turned mixed in late morning trading, as expectations of lower gasoline prices offset concerns about consumer spending. Oil prices dropped $1.60 to $56.72 a barrel after the government reported inventories of gasoline, heating oil and diesel fuel rose more than expected in the last week of 2006. Energy stocks were among the most notable decliners, with Exxon Mobil ((XOM) falling 1.2%. Chevron Corp. (CVX: chart) and British Petroleum PLC (BP: chart) also declined. The Dow was also pressured by notable losses posted by McDonald''s (MCD: chart), down 1.6%, AT&T (T: chart), down 1.6%, and DuPont (DD: chart), lower by 1.2%. Disappointing data on the services sector and December retail sales further pushed blue-chip stock lower. However, retailers, which suffered weakness earlier in the session, recovered on speculations that lower gasoline prices could boost consumer spending.

In contrast, the Nasdaq moved above the flat line. The advance by the tech-heavy average was largely contributed by strength in the semiconductor sector. Intel (INTC: chart) climbed 3.8%, helping to lead the sector higher after Banc of America raised its earnings estimates for the semiconductor giant. Strong gains by some biotechnology and internet stocks also provided a boost. In late morning trading, the Dow Jones industrial average fell 10.25, or 0.08%, to 12,464.27. The Standard & Poor''s 500 index was down 0.89, or 0.06%, at 1,415.74, and the Nasdaq composite index added 13.59, or 0.56%, to 2,436.75.


[R]Crude oil inventories fell, while gasoline stockpiles gained.[/R]
Crude oil inventories fell in the most recent week, according to government statistics released Thursday. Meanwhile, gasoline stockpiles experienced a significant build. The Department of Energy''s Energy Information Administration said that crude oil inventories slipped 1.3 million barrels in the week ended December 29. Specifically, the measure dipped to 319.7 million barrels from the previous week''s level of 321 million barrels. Oil inventories for the December 8 week were 1.2% lower than last year. Meanwhile, gasoline inventories showed a week-over-week increase of 5.6 barrels. The level of gasoline inventories was 0.7% above last year. Distillate fuel oil also had an inventory increase during the week ended December 29. Stockpiles of these products, which include heating oil, rose 2 million barrels.

[R]Factory orders gained 0.9% in November.[/R]
The Department of Commerce released its report on new orders for manufactured goods in the month of November on Thursday, showing that orders rebounded less than expected after a steep decline in the previous month. The report showed that orders rose 0.9 percent in November following a revised 4.5 percent decline in October. Economists had expected orders to increase 1.4 percent compared to the 4.7 percent decrease originally reported for the previous month. The increase in orders came as new orders for manufactured durable goods rose 1.6 percent in November following an 8.1 percent decrease in October. The Commerce Department also said that new orders for manufactured non-durable goods increased slightly. The Commerce Department added that shipments of manufactured goods rose 0.1 percent in November, matching the increase that was seen in the previous month. At the same time, inventories edged up 0.2 percent in November after rising 0.3 percent in October. Subsequently, the inventories-to-shipments ratio edged up to 1.24 in November from 1.23 in October.

[R]Business activity slowed in December.[/R]
Thursday morning, the Institute for Supply Management released its report on business activity in the services sector in the month of December. The report showed that the pace of growth in the sector slowed compared to the previous month. The Institute for Supply Management said its index of business activity in the sector fell to 57.1 in December from 58.9 in November, with a reading above 50 indicating growth in the sector. Economists had expected the index to fall to 57.0. The slowdown in the pace of expansion in the sector was partly due to slower new orders growth, with the new orders index falling to 54.4 in December from 57.1 in November. At the same time, the report showed an acceleration in the pace of employment growth, as the employment index rose to 53.3 in December from 51.6 in the previous month. Additionally, the report showed that the pace of price growth also accelerated during with month, with the prices index rising to 59.1 in December from 55.6 in November.