5:00PM Market declined after the release of home sales report.

-Yield on 10-year bond closed at 4.82% and 30-year bond closed at 4.95%.
-Crude oil fell $1.34 to $71.76 per barrel.
-Gold fell $1 to $627 per ounce.

-Asian Markets closed lower. Thailand closed 1.2% down, Japan was down 0.11%, Hong Kong was down 0.4% and India closed down 0.8%. South Korea lost 0.75%.

-European Markets closed lower. France closed 0.9% lower, Germany down 0.75% and U.K. closed 0.72% lower. South Africa closed 1.5% lower and Russia closed up 0.4%.

-Latin American Markets closed sharply lower. Brazil dropped 3.2%, Argentina and Mexico closed 1.2% lower.

Market had lot to digest after two economic reports, a deal worth $1.3 billion and continuning geopolitical problmes involving Iran. After making an early postive advance, market for reversed its course after the release of the housing report and failed to recover in the afternoon trading. Major averages closed lower with Dow down 42 points, Nasdaq down 15 points and S&P 500 down 5.8 points. After the close Apple agreed to pay $100 million to settle patent dispute case with Creative Technology, Singapore based maker of MP3 players.

Existing home sales in July dropped 4.1% from June and 11% from a year ago. The home sales to the lowest level in the last two years. The home sales are likely to dip even lower in the coming months as interest rates rise and investor driven demad for homes decline. Weekly petroleum report indicated that crude oil inventory rose 0.6million of barrels but that of gasoline dropped.

IBM agreed to pay $1.3 billion in cash to purchase Internet Security Systems. The network security company has 1,300 employees and serves 17,000 customers. IBM has been active in acquiring internet and document management companies in the alst two months.

Dutch publishing firm which was recently acquired by private equity firms, VNU Group BV named David L Calhoun as chairman of the executive board and chief executive officer of the company. Mr. Calhoun is currently at General Electric as vice chairman. VNU is controlled by private equity investors Thomas H Lee Partners and Blackstone Group.

2:00PM European markets closed lower on economic worries.
European markets closed lower led by a sharp decline in Germany, France and the U.K. French index CAC-40 lost 0.89% to close at 5,082.7, German DAX Xetra Index lost 42.87 points to close at 5,775.64 and UK FTSE Index lost 0.72% or 42.60 points to close at 5,860.00. The crude oil prices dropped sharply in New York trading after weekly petroleum report. The surprise rise in gasoline inventory led a fall in oil price of $1.44 to $71.85 per barrel.

In Swiss trading Nestle SA rose to an all time high to SFr 419.50 on earnings report. The company reported 11% rise in sales to 47.14 swiss francs and earnings rose 11% to 4.15 swiss francs for the first half of the fiscal year. The organic revenue grwoth overcame the rise in raw materials cost. The compay still express confidence that the full year earnings will reach upper end of the forecast earnings range. The company sales growth in the U.S. and emerging markets was stronger than the sluggish sales in Europe. The company also mentioned in the conference call that it will take a while for sales to rebound in china. Company was forced to recall baby milk due to higher than permitted iodine level by Chinese authority.

Tech stocks came under pressure on the news of earnings and sales warning from National Semiconductor in the U.S. STMicroelectronics dropped 1.5% to 12.44 euro, ASM Litho dropped 1.1% to 16.41 euro and Infineon lost 1.1% to 8.66 euro.

In the telecom sector Deutsche Telekom dropped 0.6% to 11.50 on the target price revision from HSBC to 10.20 euro, France Telecom fell 1% to 16.42 euro but Telekon Austria gained 2.5% to 18.97 euro on earnings news. The company earnings rose 20% in the second quarter compared to a year ago.

TNT, the Dutch mail service group, fell 2.5% to 28.45 euro after the news that it had sold its U.S. logistics business to a private equity group for 1.48 billion euros. The stock had run in aticipation of higher bid.

The stocks in the UK fell after the housing report in the U.S. showed a weakening market. The FTSE index dropped 42 points with number of mining stocks led the decliners list. BHP Billiton reported 58% rise in profit but said that in the longer terms the earnings growth will slow down. The company also said that it plans to buyback shares worth as much as $3 billion in the coming months. BHP dropped 4% to close above 10 GBP. Other minig stocks fell in sympathy.

However, Anglo Austalian pallet company rose 4.7% on the full year results. Nikanor, the copper miner in Congo Republic, jumped 3.6% on the outperfom rating from a local broker Caznove. Italian restaurant chain, Prezzo, surged 6.5% on takeover rumors and Café Nero ganied 0.6% on the speculation that hedge fund may bid for the company.


12:15PM IBM to buy Internet Security Systems for $1.3 billion.
Market averages traded lower after existing home report. Dow at mid-day is trading down 44.01 points, Nasdaq down 14.02 points and S&P 500 dropped 5.3 points. Home builders stocks declined between 1% and 3%. Toll Bros (TOL: chart) lost 74 cents to $24.47, D.R. Horton (DHI: chart) declined 46 cents to $21.05 and Bezer Homes (BZH: chart) lost $1.07 to $39.47.

IBM (IBM: chart) said that it plans to spend $1.3 billion in cash to purchase Internet Security Systems (ISSX: chart). The network monitoring and analysis company is known for network management and security seystems services for large companies. The Company stock closed at $26 in yesterday’s closing. IBM is offering only 8% proemium to acquire the company.

IBM has been actively purchasing companies in the Internet services and online document management area. ISS has app. 1,300 employees and 17,000 customers.