10:15AM New York – U.S. stocks in the early trading are struggling to gain ground as oil hovers near record levels. Gold surges. CIT soars 24% after it sells its home lending unit.

Rising tensions in the Middle East and talks of possible Israeli strike on Iranian nuclear installation spiked crude oil futures prices to $143 a barrel. The ABC News television show reported citing unidentified Pentagon sources that an attack from Israel is likely if Iran continues to pursue its nuclear ambitions.

Gold futures prices surged $12.30 to $940.60 per ounce and other precious metals rallied as well.

The economic uncertainty, rising estimates of losses at banks and probable consumer spending slow down dragged market averages sharply lower in the morning trading.

CIT Surges 24%

CIT Group surged 24% after it agreed to sell its loan portfolio of manufactured homes and decided to exit the business.

CIT Group Inc agreed to sell its manufactured housing loan portfolio to Dallas based Lone Star Funds for $1.5 billion. Lone Star will also assume liabilities of $4.4 billion. The home lending business has $9.3 billion in asset and employs 300 people in New Jersey and Oklahoma. In a separate transaction, CIT agreed to sell its $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance, Inc. for approximately $300 million. Net cash proceeds from the two transactions are expected to be approximately $1.8 billion.

In the second quarter CIT expects to record a pre-tax loss of $2.5 billion or after-tax loss of $2 billion for the sale of home lending business.

Asian Market Review

In Tokyo Nikkei 225 Index closed lower 18.18 or 0.13% to 13,463.20. In Australia ASX 200 index lower 76.40 or 1.46% to close 5,138.90. In Malaysia KL Composite index decreased 11.74 or 0.99% closed to 1,174.83. Market of Hong Kong was closed today.

In South Korea Kospi Index decreased 8.46 or 0.51% to close at 1,666.46 and Indonesia JSE Index edged increased 29.70 or 1.26% to 2,378.81. Sensex index in India plunged 499.92 or 3.71% to 12,961.68. Thailand markets were closed today.

Earnings Review

Advanced Photonix, Inc, engaged in the development and manufacture of optoelectronic devices said fourth quarter revenues decreased 1.6% to $5.2 million from $6.16 million a year ago. Net loss in the quarter was $3.1 million or 13 cents per diluted share compared to net loss of $1.3 million or 7 cents per share, a year ago. Revenues in the year dropped 1.6% to $23.2 million from $23.6 million.

Advanced Photonix, Inc (API: chart) in the last one year traded as high as $2.90 in October 2007 and as low as $1.00 in May 2008. Based on the yesterday’s closing price the company has a market cap of $41.06 million.

Castle Brands Inc, an importer of premium spirits said fourth quarter revenues increased 5% to $6.4 million from $6.1 million a year ago. Net loss in the quarter was $13.0 million or 83 cents per diluted share compared to net loss of $4.5 million or 38 cents per share, a year ago.

U.S. case sales increased 6.2% year over year to 52,899 nine liter cases in the fourth quarter of fiscal 2008. International case sales declined 18.8% in the quarter to 18,347 cases.

Castle Brands Inc (ROX: chart) in the last one year traded as high as $5.95 in July 2007 and as low as $0.17 in June 2008. Based on the yesterday’s closing price the company has a market cap of $3.13 million.

GenCorp Inc, an aerospace supplier and manager of a real-estate portfolio said second quarter revenues edged 1.23% to $194.7 million from $192.3 million a year ago. Net income in the quarter falls 45% to $6.9 million or 12 cents per diluted share compared to net income of $12.5 million or 21 cents per share, a year ago.

GenCorp Inc (GY: chart) in the last one year traded as high as $13.97 in July 2007 and as low as $7.16 in June 2008. Based on the yesterday’s closing price the company has a market cap of $408.12 million.

Hartmarx Corporation, a holding company said second quarter revenues declined 16% to $131.5 million from $155.9 million a year ago. Net loss in the quarter was $1.5 million or 4 cents per diluted share compared to net income of $5.4 million or 15 cents per share, a year ago.