[R]4:00PM New York, 10:00PM Frankfurt, 8:00AM Sydney[/R]

U.S. averages fell sharply on the new worries related to sub-prime mortgage loans and health of banking and financial brokerage institutions. After months of denying the banks and brokerages have reported large losses topped by Citigroup with a loss of $11 billion. Analysts today said that total losses in the industry may rise between $250 billion and $500 billion.

Fannie Mae and Freddie Mac fell after the New York Attorney General subpoenaed two lending institutions and said that Washington Mutual residential loans should not be refinanced by Fannie and Freddie. Stocks of all three lenders fell to multi-year lows.

Record oil and gold prices and record low in dollar against euro and other European and Asian currencies hurt the trading sentiment. Gold reached another high.

European markets closed lower led by UK with a loss of 1.3%. Banks in the region led the decline.

Cisco (CSCO: chart) reported first quarter net sales increase of 17% to $9.6 billion and net income rise of 37% to $2.2 billion, and earnings per share of 35 cents compared to 26 cents a year ago. In the regular market hours at close Cisco dropped $1.33 to $32.75 and in the after hours trading stock declined to $30.85.

[R]Global Markets Indexes[/R]

Dow Jones Industrial Average closed sharply lower 360.92 or 2.5% to a close of 13,300.02, S&P 500 dropped 2.7% or 44.63 to 1,475.64, and Nasdaq Composite Index declined 76.42 or 2.6% to a close of 2,748.76. In Toronto TSX Composite lost 251.14 or 1.75% to close at 14,119.42.

Of the 30 stocks in Dow Jones Industrial Average, 1 closed higher, 29 closed lower, and none were unchanged.

AIG led the decliners in the index ahead of earnings with a loss of 6.3% followed by declines in General Motors of 5.01%, in American Express of 4.3%, and in Citigroup of 3.2%. Boeing was the only gainers in the index with a rise of 0.17%.

Of the stocks in S&P 500, 49 closed higher, 446 fell, and 5 were unchanged. Ninety five stocks fell more than 3% and only two stocks rose more than 3%.

Washington Mutual led the decliners in the index with a sharp fall of 16% followed by declines in Capital One of 13%, in Expeditors International of 10.4%, in Fannie Mae of 9.8%, Sovereign Bancorp of 7.8%, Countrywide Financial of 7.79%, Yahoo of 7.2%, and Freddie Mac of 6.7%. Ambac, CIT, and MGIC fell more than 6.3%. Cognizant led the gainers in the index with a rise of 4.4%, followed by increases in Polo Ralph Lauren of 3.2%, in Western Union of 2.9%, and in Expedia of 2.8%.

In London FTSE 100 Index closed down 89.80 or 1.31% to 6,385.10, in Paris CAC 40 Index decreased 26.20 or 0.46% to close at 5,683.22, and in Frankfurt DAX index lost 27.57 or 0.35% to close at 7,799.62. In Zurich trading SMI dropped 67.12 or 0.77% to close at 8,703.17.

In Tokyo Nikkei 225 Index retreated 152.95 or 0.94% to close at 16,096.68, in Hong Kong Hang Seng index closed up 270.80 or 0.92% to 29,708.93, in Australia ASX 200 closed up 64.40 or 0.97% to close 6,692.00.

Sensex in India fell 110.84 or 0.57% to 19,289.83. In South Korea Kospi Index decreased 11.05 or 0.54% to close at 2,043.19, Thailand closed down 6.04 or 0.68% to 880.27, and Indonesia closed up 32.08 or 1.20% to 2,713.98. Philippines gained 14.63 or 0.39% to 3,788.26, Singapore declined 10.09 or 0.27% to 3,673.01, and Malaysia increased 24.74 or 1.78% to 1,413.85.

In Latin Markets Peru led the decliners with a fall of 3.28% followed by decreases in Mexico of 2.34%, and in Chile and Brazil of 1.54%. Venezuela led the gainers with a rise of 0.7%, followed by increases in Colombia of 0.6%, and in Argentina of 0.04%.

Bond Yields decreased on 10-year U.S. bonds to 4.33% and 30-year bonds gained to 4.66%.

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

Crude oil fell $0.33 to close at $96.37 per barrel for a front month contract, up 46.0% for the year, natural gas decreased 24 cents to $7.62 per mBtu, and gasoline futures increased 0.56 cents to close at 244.06 cents per gallon.

Gold edged higher $10.10 in New York trading to close at $833.50 per ounce, silver closed down 5 cents to $15.33 per ounce, and copper for front month delivery lost 8.25 cents to $325.90 per pound and in London trading closed up $74 to $7,484.00

Dollar edged lower against euro to $1.4554 and higher to 114.49 yen.