[R]4:00PM NY, 10:00 PM Frankfurt, 1:30AM Mumbai – Global Markets[/R]

U.S. market averages sold-off after six days of gains, dragging markets in Europe and Latin America. In overnight trading in Asia, South Korea and Hong Kong closed at a record high.

Yields edged lower on 10-year U.S. bonds and closed at 5.05% and 30-year bond rose to close at 5.15%.

Crude oil gained 62 cents to close at $72.81 per barrel, natural gas was closed up 29 cent to $6.70 per mBtu, and gasoline futures gained 2.5 cents to close at 236.94 cents per gallon.

Gold gained $1.90 to close at $664.60 per ounce, silver gained 15.5 cents to close at $12.97 per ounce, and copper futures gained $135 to close at $8,083 per metric ton.

In New York trading averages fell after first hour of trading on weak dollar, inflation comments from the Fed chairman, and sub-prime lending downgrades. Financials, retailers, and housing stocks led the decliners.

Market averages fell after first hour of trading ahead of same-store sales data. S&P downgraded $12 billion of sub-prime loans citing worst than expected performance. Dow Jones closed down 148.27 to 13,501.70, Nasdaq lost 30.86 to 2,639.16, S&P 500 fell 21.73 to 1,510.12.

Retailers fell for the second day in a row on the lowered earnings expectations from Home Depot and Sears Holdings. Home Depot (HD: chart) lowered earnings decline for the year between 15% and 18% from the previous estimate of 9%. The company also plans to buyback 250 million shares between $39 and $44 price per share. Sears Holdings (SHLD: chart) plunged nearly 10% on the second quarter earnings outlook between $160 million and $200 million on lower than expected sales and earnings per share between $1.06 and $1.32. Other retailers led the decliners. Nordstrom declined 3%, Chico’s lost 3%, J.C. Penney dropped 2%, Macy’s fell 4%, Abercrombie & Fitch and Urban Outfitters plunged 6%.

D. R. Horton (DHI: chart) orders fell 40% and reported a loss, the stock declined 2% and dragged other homebuilders with it. Brokerage stocks fell hard on worries related to sub prime lending downgrades from S&P. Lehman Brothers dropped 5% followed by 4% decline in Bear Stearns and 3% loss in Goldman Sachs and American Express.

Oil refiners bucked the sell-off in the market and Valero (VLO: chart) jumped 1% and Tesoro advanced 2.4%.

Latin Markets closed lower across the region led by 1.1% fall in Mexico and Brazil followed by 0.8% in Chile, but Argentina gained 0.4%. Government bonds of Mexico and Brazil fell in sympathy with rising yields in New York trading.

In Sao Paolo telecom stocks were in focus on takeover news. Spain based Telefonica has offered 3 billion euros for Brazilian unit, Vivo Participacoes, of Portugal Telecom. Vivo jumped as high as 4% before settling at 2.5% higher. Other cell phone carriers fell led by 1.5% drop in TIM and 0.4% decline in Telemig. Fixed-line telecom operators Oi and Brasil Telecom fell nearly 1%.

In Mexico City trading IPC index of 30 stocks fell 1% on decline in peso and government bonds. The weak trading sentiment in New York left emerging markets lower. American Movil and Carso Telecom fell 3% a day after the Mexican government agency said that antitrust inquiry is likely to be launched. Comerci UBC gained 2.5% and Grupo Vitro rose 2.8%.

In Tokyo, the index edged lower as real estate stocks and export shares declined. The benchmark Nikkei 225 Average finished 0.05% lower at 18,253. The yen strengthened to 123.43 per dollar from 123.65 at yesterday's close. The real estate sector lost on fears that the Bank of Japan may raise interest rates in near future. Two of the biggest real estate developers dropped. Mitsui Fudosan dipped 1.4% and Mitsubishi Estate lost 1.5%. Exporters also suffered as the yen strengthened against the dollar. Toyota lost 0.5 percent, while Canon Inc. fell 1 percent.

China reported June trade surplus of $26.9 billion, 87% jump from a year ago. The June surplus exceeded the previous monthly record set in October of 2006 with a surplus of $23.8 billion. Exports soared 27% to $103.3 billion and imports gained 14% $76.4 billion in the month. For the first half of the year the surplus rose 84% from a year ago to $112.5 billion. For the year 2006 trade surplus was reported at $177 billion and estimates for the current year surplus is above $255 billion.

Singapore reported second quarter annualized GDP growth rate of 8.2% from a year ago and 12.8% from the first quarter. The first quarter growth rate was revised upwards to 8.5% from 7.6%. A growth of 10.2% in manufacturing lifted the second quarter growth above expectations, despite weak electronics sector. On the news, Singapore stock market rallied to a record intra-day high of 3,653 but fell 0.2% for the day.


[R]1:00PM NY, 5:00 PM Frankfurt European markets closed lower, led by resource stocks.[/R]

European stock markets closed in the negative on Tuesday, pressured by weak dollar and a record foreign-exchange high for the euro. The euro hit an all-time high of $1.3738 vs. the dollar ahead of the Fed Reserve’s Chairman Bernanke's comments. Declines on Wall Street also weighed on regional markets sentiment. Profit warning from retailer Home depot sparked new concerns about the struggling U.S. housing market. Germany and France led decliners, posting a drop of 1.4%.followed by the U.K. with a decline of 1.2%.

In Frankfurt shares of automaker declined. Volkswagen fell 1.7%, while BMW declined 2.5%. In the tech sector, Siemens, which makes 20% of its sales in the U.S, dropped 2.4% on weak dollar.