10:00PM Frankfurt, 4:00PM New York, 8:00AM Sydney – European markets declined and are likely to open 1% lower on a fall in metals and oil prices. Banks and telecom stocks in the region declined on lowered earnings expectations.

Global Markets Update

Telecom, technology, miners and banks dropped across Europe on weak trading and shaky investor confidence. Market averages failed to follow through after a sharp rise on a rate cut in the U.S. on Tuesday. Metals fell sharply led by a pull back in Silver, platinum, and gold.

Ericsson fell 8% after its venture with Sony that makes handset suggested a decline in profit. Nokia fell 6% as well. Telecom Italia declined 5.4% after a media report suggested that the company may have to raise capital through equity offering or asset sale. Deutsche Telekom dropped 5.5% on a lower earnings estimate.

HBOS plunged 17% before it recovered to close down 7% on the speculation that the company may face liquidity crisis, which the company denied. BNP rose 4.7% after Societe Generale said that it is no longer looking to merge with its smaller rival. Soc Gen gained 7%.

In the U.S. trading, Visa, the largest payment card processing company priced its offering at $44 per share on Tuesday. The deal was expected to be priced between $37 and $42. The stock opened at $68 and quickly traded down to $59. Visa, in the largest public offering in the U.S., raised $17.9 billion and offered 406 million shares. The offering values the company at $42.5 billion. MasterCard, the second largest processor jumped to $215 in the morning trading.

Morgan Stanley reported revenue decline of 17% to $8.3 billion and earnings fall of 35% to $1.55 billion. Earnings per share declined to $1.45 from $2.17 in the first quarter of previous fiscal year. In the quarter Morgan wrote down $1.1 billion of sub-prime loans. Asset management group reported 5% increase in assets to $722 billion. Average broker at Morgan had $85 million of client assets and generated $761,000 in commissions.

In New York trading, commodities declined as investors worried that a U.S. recession will hurt demand for precious and base metals, steel, copper, and crude oil and natural gas. Front month futures of crude oil and gold dropped more than 5%, silver lost 8%, and copper declined 3%. Futures of the next month wheat led the agricultural with a decline of 7% followed by losses in Soybean and Cocoa of 6%.

Stocks in Japan rallied tracking the gains in the U.S. Other Asian markets gained as well. The Federal Reserve Bank lowered its benchmark rate 0.75% to 2.25%, lowest in the last three years. The decision lifted financial stocks in Japan and across Asia. In Tokyo trading Nikkei 225 increased 2.48% or 296.28 to 12,260.44, and the broader Topix Index gained 2.8% or 32.67 to 1,196.30.

European Markets

In London FTSE 100 Index closed lower 60.20 or 1.07% to 5,545.60, in Paris CAC 40 Index decreased 26.64 or 0.58% to close at 4,555.95 and in Frankfurt DAX index lower 32.17 or 0.50% to close at 6,361.22. In Zurich trading SMI increased 59.12 or 0.84% to close at 7,072.99.

North American Markets indexes

Dow Jones Industrial Average declined 293.00 or 2.36% to a close of 12,099.66, S&P 500 closed down 32.32 or 2.43% to 1,298.42, and Nasdaq Composite Index declined 58.30 or 2.57% to a close at 2,209.96. In Toronto TSX Composite closed down 427.32 or 3.25% to 12,709.38.

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

Alcoa led the decliners in the index with a fall of 7.7% followed by losses in Chevron of 4.9%, in Exxon Mobil of 4.6%, and in DuPont of 4.21%. Coca Cola was the only gainers with a rise of 0.93%.

Of the stocks in S&P 500 index, 84 stocks increased, 414 declined, and none were unchanged. Of the stocks in the index, 161 stocks fell more than 3% and 10 gained more than 3%.

Discover Financial led the decliners in the index with a fall of 12.6% followed by losses in CIT Group of 12.4%, in Monsanto of 11.8%, and in Freeport McMoran of 11.24%, and in Merrill Lynch of 11.1%. Merrill Lynch, Bear Stearns, and Lehman Brothers along with National Oilwell Varco and Peabody Energy dropped 9%.

Freddie Mac led the gainers in the with a rise of 14.9% followed by increases in Adobe Systems of 9%, in Fannie Mae of 8.8%, and in National City of 8.7%.

South American Markets Indexes

In Latin Markets Brazil led the decliners in the region with a fall of 5.01% followed by decreases in Argentina of 3.25%, in Peru of 1.87%, and in Mexico of 1.51%. Colombia rose 0.13% and Venezuela added 0.65%.