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

U.S. market played hostage to earnings for the second day in a row. Merrill Lynch reported larger than earlier estimated loss in subprime lending and trading business. Several U.S. tech companies’ earnings disappointed investors.

In Europe STMicroelectronics and TomTom reported better than expected earnings. Glaxo reported net earnings decline of 5.8% after taking $3 billion restructuring charge. Friends Provident said that it will return one billion pounds to shareholders if a merger with the UK insurer Resolution is completed.

[R]Global Markets Indexes[/R]

Dow Jones Industrial Average closed down 0.98 or 0.01% to a close of 13,675.25, S&P 500 edged lower 0.24% or 3.27 to 1,515.89, and Nasdaq Composite Index traded down 24.50 or 0.88% to a close of 2,774.76. In Toronto TSX Composite rose 5.06 or 0.04% to close at 14,082.43.

Of the 30 stocks in Dow Jones Industrial Average 15 closed higher, 15 closed lower, and none were unchanged.

Intel led the decliners in the index with a loss of 3% followed by losses in IBM of 1.5%, Citigroup of 1.46%, and AT&T of 1.1%. Caterpillar led the gainers with a rise of 1.84% followed by increases in Du Pont of 1.56%, Microsoft of 1.13%, and General Motors of 0.89%.

Of the stocks in S&P 500, 224 closed higher, 271 fell, and 5 were unchanged.

Thirty one stocks fell more than 3% and nineteen stocks rose more than 3%.

Paccar led the gainers with a rise of 11.6% followed by increases in QLogic of 11.05%, Snap-On of 6.7%, and in Western Union of 5.4%. Allegheny Technology added 5.2% on the earnings news. Broadcom led the decliners with a fall of 17% followed by losses in Altera of 16%, Amazon.com of 12%, Ambac of 8.8%, and Juniper Networks of 8.4%. Countrywide Financial and Wrigley fell more than 8%.

In London FTSE 100 Index closed down 32.00 or 0.49% to 6,482.00, in Paris CAC 40 index fell 30.38 or 0.53% to close at 5,674.67, and in Frankfurt DAX index decreased 0.18% or 13.83 to close at 7,828.96. In Zurich trading SMI lost 0.59% or 52.21 to close at 8,851.02. Sweden and Spain led the region with a loss of more than 1.3%.

In Tokyo Nikkei 225 index lost 0.56% or 92.19 to close at 16,358.39, in Hong Kong Hang Seng index closed down 0.15% or 43.23 to 29,333.53, in Australia ASX 200 closed down 26.50 or 0.40% to close 6,634.40.

Sensex in India edged higher 0.11% or 20.07 to 18,512.91. In South Korea Kospi Index decreased 14.62 or 0.75% to close at 1,933.36 and Indonesia closed down 28.82 or 1.13% to 2,524.98. Philippines added 1.80% to 3,763.47, Singapore lost 1.25% to 3,649.12, and Malaysia increased 0.18% to 1,359.83.

In Latin Markets Peru led the decliners with a fall of 1.03% followed by decreases of 0.60% in Mexico, and 0.56% in Colombia. Argentina edged 0.21% higher and Brazil closed nearly unchanged.

Bond Yields edged lower on 10-year U.S. bonds to 4.34% and 30-year bonds dropped to close at 4.64%.

[R]Commodities, Metals, and Currencies[/R]

Crude oil rose $1.83 to close at $87.10 per barrel for a front month contract, up 41.0% for the year, natural gas increased 21 cents to $6.97 per mBtu, and gasoline futures declined 3.86 cents to close at 214.75 cents per gallon.

Gold edged higher $2.50 in New York trading to close at $765.60 per ounce, silver closed down 6 cents to $13.59 per ounce, and copper for front month delivery in London added $36.00 to $7,821.00 per pound.

Dollar edged low against euro to $1.4260 from $1.4259 and lower to 114.170 yen from 114.523 yen.

[R]12:30PM New York – U.S. financial and tech stocks disappoint investors and helped market averages to trend lower.[/R]

Dow Jones Industrial Average fell 136.24 to 13,540.34, Nasdaq index dropped 52.97 to 2,746.29, and S&P 500 index declined 19 to 1,500.54.