[R]1:00PM NY, 5:00 PM Frankfurt European markets closed deeply in the red on weak U.S. jobs data.[/R]

European stock markets finished deeply in the red Friday, tracking U.S. losses amid concerns about the health of the economy, raised by weaker-than-expected U.S. jobs data. Employment in August fell for the first time in four years, well below expectations of a notable increase. Banks, auto makers and miners led the decline. Across regional markets, France posted the steepest drop of 2.6%, followed by Germany, down 2.4% and the U.K. losing 1.9%.

In Frankfurt bank shares suffered weakness, with Commerzbank falling 5.2%. Export-related issues posted losses as the dollar slipped on the weak economic data. Automakers stood out among losers. Shares in Porsche slid 5.2%, BMW dropped 3.9% and DaimlerChrysler fell 3.3%.

In Paris stocks dropped, led by Societe Generale and BNP Paribas. Societe Generale shares fell 3.9% on speculation that the lender may lower its profit forecast. BNP Paribas retreated 3.4%. Among other notable losers, Natixis shares lost 4.5%.

In London financial shares led the decline. Barclays lost 4.2% after the bank said it was prepared to underwrite another of its structured investment funds. Another bank, HSBC Holdings fell 1.6%, reflecting shareholder’s pressure to review its strategy. Mining stocks also traded in the negative. Shares in Xstrata dropped 3.5%, Anglo American shares lost 3.4% and Rio Tinto slipped 3.2%. BAE Systems helped limit losses, posting an advance of 1.3% amid reports of a 20 billion-pound deal next week to supply jets to Saudi Arabia.


[R]11:30AM Market averages plunged, with the Nasdaq down 2%, Dow losing 1.7%.[/R]

U.S. stocks tumbled while bonds surged higher Friday following a deeply disappointing government report which showed payrolls in August fell unexpectedly for the first time in four years. The Dow Jones slipped more than 200 points.

The data raised optimism that the Fed will cut interest rates by at least 25 basis points at the central bank meeting on September 18. By the end of the year, the fed funds rate is expected to drop to 4.25%. In another report, the Commerce Department said U.S. wholesale inventories rose 0.2% in July, a slower pace than in June. as automotive, petroleum and other stockpiles fell.

The markets experienced broad based weakness, with the vast majority of sectors posting significant losses. Financial stocks moved sharply lower. American Express (AXP: chart) fell 3%, Lehman Bros (LEH: chart) lost 2.4%, Morgan Stanley (MS: chart) fell 1.2%, Merrill Lynch (MER: chart) lost 1.4%. Among housing stocks, Beazer Homes (BZH: chart) dropped 9% after the company received default notices for five senior notes due between 2011 and 2016.

The tech sector also lost ground following the employment report. Apple (APPL: chart) fell 3% a day after its CEO replied to customer complaints about a quick price reduction on the iPhone and said the company would give $100 store credits to certain iPhone buyers. Disk drive stocks were notable losers, with Network Appliance (NTAP: chart) and SanDisk (SNDK: chart) posting losses of 4.1% and 4.7% respectively.

In late morning trading, the Dow fell 221.60, or 1.66%, to 13,141.75. The Standard & Poor''s 500 index fell 24.36, or 1.65%, to 1,454.19, and the Nasdaq composite index fell 53.79, or 2.06%to 2,560.53. Bonds, meanwhile, soared following the jobs report. The yield on the benchmark 10-year Treasury note skidded to 4.39% from 4.51% late Thursday.

[R]Wholesale inventories rose 0.2%.[/R]

The Department of Commerce released its report on wholesale inventories and sales in the month of July on Friday, showing that inventories increased by less than economists had expected and sales rose modestly. The report showed that wholesale inventories rose 0.2 percent in July following a downwardly revised 0.3 percent increase in June. Economists had expected the growth in inventories to match the 0.5 percent increase originally reported for the previous month.

The modest increase in inventories came as a 1.5 percent increase in inventories of non-durable good more than offset a 0.5 percent decrease in inventories of durable goods. The Commerce Department also said that wholesale sales edged up 0.1 percent in July after rising 0.4 percent in June. While sales of non-durable goods rose 0.1 percent, sales of durable goods were unchanged. Subsequently, the report also showed that the wholesale inventories/sale ratio came in unchanged from the previous month at 1.11, although it is down from the July 2006 ratio of 1.13.


[R]10:30AM New York, 8:00PM Mumbai – Wholesale inflation declined at the end of last week. Sensex gained 1.8% in the week.[/R]

Sensex in Mumbai trading lost 25.89 or 0.2% to close at 15,590.42 and CNX Nifty declined 9.10 or 0.2% to close at 4,509.50.

Of the stocks traded on Bombay Stock Exchange, 1,383 gained, 1,381 declined, and 71 were unchanged. Daily turnover in BSE trading increased to 4,863 crore rupees from 4,670 crore in Thursday trading. Of the 30 stocks listed in Sensex 20 declined and 10 gained. ITC with a gain of 1.6% led the gainers in the index and Cipla led the decliners in the index with a loss of 2.5%.

ICICI Bank is launching an infrastructure fund for $2 billion in the next three months. India has seen a surge of infrastructure funds in the last six months with at least three others funds are in the process of raising more than $1 billion. The country’s rickety infrastructure costs delays in transportation of goods at ports and distribution to the factory locations. Less than 2% of nation’s road network is four lane highways and most ports are antiquated by international standards.

Reliance Industries fell 1.3% to 1,957 rupees after the Communist and Samajwadi Parties expressed their reservation to a proposed price for natural gas sale from Krishna Godavari energy basin. The fertilizer minister Ram Vilas said that the proposed price of $4.33 mBTU is higher than the government is willing to pay. He did not elaborate or offered any alternative price for the purchase.