U.S. AVERAGES

Late hour 2% sell-off in oil failed to halt market decline.

Lower read on consumer Sentiment and Fed Chairman’s cautious remarks put market in the sell-off mood this morning. Oil traders remain focused on the Florida hurricane and as the likelihood of hurricane damages to oil infrastructure declined oil sold-off in the final hour dragging with it energy exploration and service stocks.

Fed Chairman made a final appearance at the Fed’s annual gathering of central bankers organized by Federal Reserve Bank of Kansas. Mr. Greenspan delivered one of his most cautious remarks in the health of the economy and his views on budget and trade deficit. The comments highlighted long term economic imbalances in the economy recent housing boom.

The chairman said that history has not dealt kindly with the aftermath of protracted periods of low risk premiums.

The housing sector is still among one of the day's worst performers, down 1.5% in the afternoon only to recover to 1% loss at close, after comments by Fed Chairman Greenspan, who called the housing boom an economic ""imbalance"" and warned about the possible consequences of low risk premiums-like those evidenced by low treasury yields and low mortgage rates. The housing stocks closed at two-month low.

Very few sectors are to the upside. The gold segment remains slightly above the flat line at present.

Precision Castparts (PCP: chart) hit a fresh 52-week high after announcement that it has agreed to buy Special Metals Corp. in a $540 million accretive transaction. Liberty Corp. (LC: chart) has also reached a new high with its own 26% acquisition-related rise.

Verizon (VZ: chart) has declined to new 52-week low it hit yesterday. PETCO (PETC: chart) has extended its low with an earnings-related 14% decline.

Home Depot Inc. (HD: chart), the world's biggest home improvement retailer, dropped 1.1% and is among the Dow's biggest percentage losers. Rival home improvement chain Lowe's Companies Inc. (LOW: chart) slid 1.7%.

DOV Pharmaceutical is down $2.70 to $15.27 after the drug-maker said Thursday that it has suspended a clinical trial of its experimental anti-anxiety drug. Pixar slipped $0.83 to $42.17 on news that the SEC has started an informal probe into the company.

Omnivision Technologies climbed nearly 13% after the chipmaker announced that 2Q earnings and revenue are likely to beat forecasts.

Chico’s after reporting 35% growth in earnings and cautioning on lower third quarter margin saw its stock declined by 8.3%.

Of the 30 DOW components six stocks were up, two unchanged and 22 declined.

ECONOMIC NEWS

The consumer sentiment index of the University of Michigan declined to 89.1 in late August from 96.5 in July and 92.7 in early August. It's the first drop since May and the lowest level since May. Economists were expecting the index to fall to 92.6.

INTERNATIONAL MARKET NEWS

European markets ended lower Friday after oil held above $67 a barrel and U.S. markets dipped into the negative territory. The German DAX 30 shed 1.5% at 4,783, the French CAC 40 dropped 0.8% to 4,342 and the U.K.'s FTSE 100 index declined 0.5% to 5,2282.

Asian markets closed higher on Friday benefiting from modest gains on U.S. market and firm crude-oil prices. Tokyo's Nikkei Average closed up 0.28%, at 12,439.48 on interest in steel and auto shares. Elsewhere in the region, Hong Kong's Hang Seng index gained 0.63% to 14,983.89, Australia's All Ordinaries index added 0.35% to 4,419.10 and in Singapore, the Straits Times index rose 0.09% to 2,286.55. Seoul's Kospi index went against the upward trend shedding 0.98% to 1.086.55 on broad foreign selling of financial stocks and surging oil fears.

The Chinese Yuan reached its highest level since a July 21 revaluation, closing at 8.0965 Yuan per $1. It finished at 8.1002 per $1 Thursday.