[R]11:00AM New York – Early rally in U.S. averages fades as trading enters in the second hour.[/R]

Dow Jones Industrial Average rose 35.61 to 13,394.32, Nasdaq increased 9.45 to 2,686.24, and S&P 500 gained 5.07 to 1,481.34.

November new home sales decline of 9% was the steepest level in sixteen years. The new home sales declined to a seasonally adjusted rate of 647,000. The Commerce Department also revised the October new home sales rise to 1.7% at annual rate of 711,000 from 728,000.

November sales fell 34.4% from a year ago in November, second largest decline after 35.3% plunge in 1991.

The median sales price of new houses sold in November 2007 was $239,100; the average sales price was $293,300. The seasonally adjusted estimate of new houses for sale at the end of November was 505,000. This represents a supply of 9.3 months at the current sales rate.

Home builders fell sharply after the report. D R Horton dropped 53 cents to $13.13, Toll Brothers lost 39 cents to $19.95, and Lennar declined 51 cents to $17.19.

Bank stocks after one hour of trading declined on the talks of asset sale from Merrill Lynch, HSBC, and Citigroup. Citigroup is likely to face another round of debt losses as much as$10 billion in the current quarter. The bank may sell its non-strategic assets including stake in Brazilian credit card processor, student and auto loan operations, and branch networks in emerging markets.

Citigroup (C: chart) fell 7 cents to $29.50, Merrill Lynch declined 24 cents to $52.96, and HSBC lost 45 cents to $83.62.

Berkshire Hathaway has agreed to buy a reinsurance company from ING for $433 million. Berkshire also plans to start a new bond reinsurance companies to insure bonds issued by state, municipal agencies, and other state government agencies. The current malaise in the credit market has hurt the rating agencies stocks including Ambac and MBIA.

MBIA (MBI: chart) dropped $3.23 or 14.6% to $19.02 and Ambac lost $4.09 or 14.4%, to $24.96.

Genesco (GCO: chart) jumped 14% or $4.57 to $37.63 after a judge ruled that Finish Line must complete its takeover offer for the company. The judge said that Finish Line and its financial advisor should have factored current earnings troubles at Genesco and should not be used as a reason not to go ahead with the offer.

In Tokyo Nikkei 225 Index closed lower 256.91 or 1.65% to 15,307.78, in Hong Kong Hang Seng index closed lower 472.33 or 1.70% to 27,370.60, in Australia ASX 200 decreased 11.00 or 0.17% to close 6,339.70.

In South Korea Kospi Index decreased 11.49 or 0.60% to close at 1,897.13, in Thailand SET index closed higher 3.86 or 0.62% to 630.73, and Indonesia JSE Index edged up 6.12 or 0.22% to 2,745.83. Sensex index in India declined 9.77 or 0.05% to 20,206.95.

Pakistan stock market is closed for three days on account of assassination of the former Prime Minister Benazir Bhutto. The Karachi Index is expected to decline between 4% and 10% when it opens on Monday and may fall further if political instability continues. The index for the year has appreciated sharply and is one the best performing markets in the world. Karachi Index is up 47% for the year so far.


[R]5:00AM New York, 7:00PM Tokyo- Japan’s core consumers prices increase 0.6% for the year in November. Industrial production plummets 1.6% in November.[/R]

Stocks in Japan closed the year in negative territory on weakening global credit markets and rising inflation as energy costs continue to soar.

In Tokyo trading Nikkei 225 fell 1.65% or 256.91 to 15,307.78, and is down 11% for the year, while the broader Topix Index declined 1.6% or 24.26 to 1,475.68, a 12% plunge for the year.

In the first section of the Tokyo Stock Exchange 8.8 billion shares valued at 1.0 trillion yen were traded and in the second section 308 million shares valued at 5.3 billion yen changed hands.

Of the Nikkei 225 stocks 14 gained, 203 declined, and 8 were unchanged. Takeda Pharmaceutical Company led gainers with a rise of 3.03% followed by Nippon Oil Corp gaining 2.02%.

The Ministry of Internal Affairs and Communication’s Statistics Bureau reported today that Japan’s consumer price index fell 0.2% in November from the previous month, but soared 0.6% for the year in November to 100.7.