[R]4:30PM New York, 10:30PM Frankfurt, 2:00 AM Mumbai[/R]

[R]Market averages in New York lost its early momentum and closed fractionally lower at close. European markets closed higher. Asian markets led the world indexes with several markets closing near 3% gains. The Bank of Japan left rates unchanged. Subprime loan debacle continues to drag investor confidence around the world.[/R]

Dow Jones Industrial Average lost 0.25 to 13,235.88, Nasdaq fell 11.11 to 2,541.69, and S & P 500 declined 1.57 to 1,462.50.

FTSE 100 Index in the U.K. closed down 0.90 or 0.01% to 6,196.90, in Tokyo Nikkei 225 closed at 16,316.32, up 2.6% or 415.58, and in Brazil, iBovespa Index traded down 216.08 or 0.42% to 51,528.48.

Yields edged lower on 10-year U.S. bonds and closed at 4.62% and 30-year bond rose to close at 4.921%.The yield spread between the long and short narrowed as investors pile on to the treasuries.

Crude oil increased 33 cents to close at $69.59 per barrel, natural gas closed up 2 cents to $5.60 per mBtu, and gasoline futures increased 3.05 cents to close at 191.95 cents per gallon.

Gold lost 30 cents in New York trading to close at $668.40 per ounce, silver lost 7 cents to close at $11.79 per ounce, and copper futures gained $179.50 to close at $7,201.50 per metric ton.

In New York averages opened higher but lost the momentum as trading progressed. The $2 billion investment in Countrywide by Bank of America was seen as a vote of confidence in the morning trading, but by afternoon trader moods had changed. Traders were wondering that favorable terms offered to Bank of America may indicate that the financial position of the loan portfolio may be weaker than anticipated by the mortgage lender. Countrywide jumped 15% at the open but closed up only a fraction. Investors kept wondering how many other companies out there with subprime portfolio that are worth less than they are valued on the book. Bank of China, second largest Chinese bank said that it has app $10 billion of subprime loan exposure and has set aside $132 million for loan losses. Mitsubishi UFJ, Japan’s largest bank, said that it has $2.6 billion and sixteen Taiwan based banks have 1.2 billion of exposure in the subprime and collateralized debts.

On the earnings front several companies disappointed investors. The Children’s Place fell 17% after company reported a loss and lowered its earnings outlook for the year. Aeropostale, Inc (ARO: chart) second quarter earnings jumped to $14.7 million from $8.4 million and earnings per share rose to 19 cents per share from 10 cents per share a year ago. Bebe stores (BEBE: chart) earnings in the fourth quarter fell to 21 cents from 23 cents a year ago on gross margin decline to 48.1% from 50.5%. JDS Uniphase reported larger than expected profit in the fourth quarter but optical business revenue fell 15% prompting the stock to lose 5%.

Of the 30 stocks in Dow Jones Industrial Average 18 closed lower and 12 advanced. Of the 30 stocks in index, 6 lost more than 1% and 3 gained more than 1%. Home Depot led the decliners with a loss of 2.1% followed by a fall of 1.7% in Boeing and General Motors. Hewlett Packard led the gainers with jumped 1.7%, McDonalds rose 1.2%, and IBM gained 1%.

Of the stocks in S&P 500, 347 stocks closed lower and 146 gained, 7 stock closed unchanged. Nucor led the decliners with a fall on 4.2% followed by losses of 4% in JDS Uniphase, Norfolk Southern, and Intuit. CSX, Janus and First Horizon lost 3.7%. Limited Brands led the gainers in the index with a rise of 5.5% followed by gains of 3.9% in Supervalu, 3.2% in Computer Science. Tyson Foods, Windstream, and Weatherford International jumped 2.7%.

Asian markets climbed higher across the region. Philippines and Taiwan led the region with a gain of 2.8% followed by rises of 2.7% in Hong Kong, 2.5% in Australia and Indonesia, and 2.8% in Taiwan. Japan jumped 2.6% on the Bank of Japan decision to leave the rates unchanged. India fell on the worries that sharp division within ruling coalition on the proposed nuclear deal with the U.S. may threaten the government.

In Shanghai trading CSI 300 gained 1.7% or 84.24 to close at 5,135.93. The Shanghai Composite Index jumped 1.1% to close at 1,415.18.

In European markets stocks closed higher across the region. Norway led the region with a gain of 0.75% followed by 0.3% rise in Switzerland, 0.2% in Germany, and 0.1% in France and UK. Spain fell 0.5%. German government reported fiscal surplus in the first half. The consolidated budget for the federal and regional governments and social security was recorded at 1.2 billion euros or $1.6 billion. The recovery in fiscal deficit was on the higher tax revenue. The historic budget surplus was last recorded in the second half of 2000 and only twice in 1973 and 1989 according to the Federal Statistical Office.

In Latin Markets trading Argentina led the region with a gain of 1.2% followed by Mexico with a rise of 0.6%, Brazil with a gain of 0.02%. Chile fell 0.23%.

Of the 60 stocks in the Brazil iBovespa index 22 closed higher and 38 closed lower. Cyrela and Electrobras led the decliners with a loss of 4.8% in the index stocks. Natura and Aracruz fell more than 3%. Telesp led the gainers in the index with a rise of 5.2% followed by 4.3% gain in Brasil Telecom, and 3.3% rise in Souza Cruz and Cyrela Commercial.


[R]12:00PM New York, 17:00PM London-London shares rose marginally in cautious trading. UK gets EU approval to resume beef exports. Second quarter business investment surged 7.4%. Competition Commission to lift ban on prices on four giant bank.[/R]

London shares closed virtually unmoved in nervous trading Thursday. Financial and consumer shares led. After rising 1.1% in early morning trade, London shares rose a slender 0.02%, tracking weaker US share after adding 1.81% in yesterday’s trading. Of the 100 FTSE shares, 54 rose, 45 dropped and 3 were unchanged.

In London trading FTSE 100 rose 0.02% or 1.4 to 6 197.40 in mixed trading, as US shares opened flat. Financial and consumer shares led. The pound rose beyond $2 on speculation the Bank of England will raise interest rates. Office of National Statistics announced Thursday business investment in Q2 up 7.4% year-on-year and up 0.8% on Q1 thanks to increased expenditure by non-manufacturing industries, both private and public. Compared with 2006 Q2, total non-manufacturing investment rose 8.1% and private sector manufacturing pushed higher 2.4%. Public corporations manufacturing fell 29.2 %.