[R]4:30PM New York, 10:30PM Frankfurt, 2:00AM Mumbai – General Motors preliminary agreement with the union helped indexes to advance. Sallie Mae purchase is likely to fall through in the wake of credit market turmoil.[/R]

Dow Jones Industrial Average increased 99.59 or 0.72% to 13,878.15, Nasdaq gained 15.58 or 0.58% to 2,699.03, and S&P 500 added 8.21 or 0.54% to 1,525.42. In Toronto TSX Composite gained 0.29% or 40.02 to close at 14,037.64.

In Brazil, iBovespa Index closed 1.40% higher or 823.32 to 59,681.10 and in Mexico Bolsa index fell 0.09% or 26.23 to close at 30,268.54.

In London FTSE 100 Index in London gained 36.10 or 0.56% to 6,433.00, in Paris CAC 40 index added 0.87% or 49.18 to close at 5,690.77, and in Frankfurt DAX index increased 0.45% or 34.71 to close at 7,804.15. In Zurich trading SMI added 0.35% or 30.56 to close at 8,859.71.

In Tokyo stock market Nikkei 225 index jumped 0.21% or 34.01 to close at 16,435.74, in Hong Kong Hang Seng market was closed but yesterday closed down 0.46% or 121.65 to 26,430.29, in Australia ASX 200 closed down 0.02% or 1.60 to 6,481.40, and in India Sensex closed up 21.80 or 0.3% to a record close of 16,921.39.

Bond Yields were unchanged on 10-year U.S. bonds to 4.63% and 30-year bond declined to close at 4.899%.

Crude oil gained $0.97 to close at $80.30 per barrel for a front month contract but still up 32% for the year so far, natural gas added 6 cents to $6.42 per mBtu, and gasoline futures declined 1.05 cents to close at 202.74 cents per gallon.

Gold declined $3.30 in New York trading to close at $735.50 per ounce, silver closed down 7 cents to $13.54 per ounce, and copper for front month delivery in London lost $41.00 to $8,036.00 per pound.

Dollar gained to close at $1.41423 to a euro and to 115.60 yen. For the year the dollar is down 7.0% against euro and 3.5% against yen.

Of the 30 stocks in Dow Jones Industrial Average 4 closed lower, 26 closed higher, and none was unchanged. General Motors soared 9.4% to $37.64 and led the gainers in index followed by a rise of 4% in Alcoa, 1.4% in Pfizer, 1.3% in Disney. McDonalds, Proctor & Gamble, Verizon added 1%.

Of the stocks in S&P 500 351 stocks closed higher, 141 fell, and 8 closed unchanged. Twenty five stocks in the index added more than 3%. After General Motors, Bear Stearns added 7.7% and led the gainers in the index followed by a rise of 6.6% in Ford Motor, 5.4% in Office Depot, 5.2% in CME Group, 5% in Whole Foods, 4.75% in Goodyear Tire, and 4% in Alcoa and Wyndham.

Pulte Homes led the decliners with a loss of 8% followed by a loss of 5.8% in Newmont Mining, 4.2% in MEMC Electric Materials and Robert Half, 4.0% in Lennar and KB Home, and 3% in D R Horton and Ambac Financial.

In New York stocks opened and closed higher. In the morning trading durable goods orders and preliminary agreement between GM and UAW affected trading sentiment. August durable goods order fell 4.9% raising speculation that another rate cut may be necessary. However, the sharp decline in spending may not bode well for the economy. General Motors and UAW have agreed to set up a union controlled fund to pay for healthcare benefits of retirees and remove the future liability from the books of GM in the exchange of job security. The news lifted GM stock by 10% and other auto stocks between 4% and 6%.

By the mid-day three popular indexes were up on strength in tech stocks and firm price in energy markets. European markets closed higher led by financial stocks and revised bid from OMX from Dubai Borse. In the late afternoon trading, as the news spread in the market that Bear Stearns is talking to potential investors including Warren Buffett, the financial and brokers stocks firmed. As the market traded in the final minutes the news of potential deal troubles came in.

Sallie Mae (SLM: chart) said in a statement today the buyout group led by a private equity group J C Flowers and banks J P Morgan and Bank of America may not complete the purchase of the company. The deal was agreed at $60 per share or $25 billion. The buyout group alleged that the new legislation and weaker economy justifies lower value of the company. The company said that it plans to pursue all legal remedies to prevent the group from walking away. The company had said that soon to be signed new law will lower the core earnings annually by 2.1% over the next five years. After the news the stock fell 10% but managed to recover to a loss of 2.68% at the close.

Children’s Place (PLCE: chart) forced out its chief executive after company investigation discovered violations of improper stock distributions. Mr. Ezra Dabah ‘resigned’ after the company’s internal investigation found that he ‘violated the company code of conduct’. Chuck Crovitz, the current board member will act as an interim chief executive.

Bear Stearns (BSC: chart) jumped during the session above 10% but settled 7.6% higher on the news that the company is discussing with several investors including billionaire investor Warren Buffett.

European markets close higher led by rising financial stocks. Spain with a rise of 1.4% led the gainers in the region followed by increases of 0.9% in France and Italy, 0.8% in the Netherlands, and 0.6% in the UK, and 0.5% in Germany, and 0.4% in Switzerland. Borse Dubai offered revised its offer for OMX by 15% and Northern Rock rose 12% on the news that the company has received takeover interest. Unicredit in Italy added 1.6% on the growth in emerging markets and Deutsche Borse added 3.5% on revised price target from Credit Suisse. Hennes & Mauritz jumped 3% after the company reported earnings increase of 25%.

In the overnight trading Asian markets closed higher with India closing at a record high. Indonesia led the region with a rise of 1.32% followed by a gain of 1.1% in Thailand, 1.1% in Philippines, 0.7% in Singapore, and 0.5% in Korea.

In Latin Markets trading Brazil and Argentina led the gainers with a rise of 1.5% followed by increase of 0.5% in Chile, and 0.03% in Mexico. Of the 63 stocks in iBovespa index 48 gained, 15 lost, and none closed unchanged. Gafisa led the gainers in the index with a rise of 4% followed by 3.7% in Banco Itau, 3.6% in Cyrela and Bradesco, and 2.4% in Banco Do Brasil.

[R]3:00PM New York, 8:00PM London – Financial stocks in London advance as banks did not need to participate in BoE bond auction at a higher rate.[/R]