US Equities
US stocks tumbled as concerns over more losses from the mortgage crisis hurt shares of banks, and the two biggest home finance providers, pushing all three major indexes lower.

Declining stocks outnumbered advancing ones by about 2.5 to 1 on the NYSE while, on the Nasdaq, decliners beat advancers by a ratio of about 2 to 1.

Fannie Mae and Freddie Mac shed more than 20%, to their lowest level in 20 years, on concerns the government will be forced to bail out the mortgage-finance companies; a rescue of the companies, which own or guarantee 42% of the $12 trillion in US home loans, would include preferred stock with a seniority, dividend preference and convertibility that would wipe out common stockholders.

Shares of Lehman Brothers fell 7%. The Wall Street Journal reported that analysts expect a third-quarter loss of at least $1.8B.

Shares of Bank America dropped 4.6%, while Citigroup tumbled 5%. Both were among the biggest drags on the S&P.

MBIA and Ambac Financial Group bucked the trend, rising 5.4% and 4.8% respectively. The largest bond insurers had their credit ratings affirmed and a report showed unexpected growth in New York manufacturing.

Adding to market anxiety was a report showing that home builder sentiment remained at a record low in August. Builders are delaying projects as sales drop, foreclosures throw more houses on the market and prices tumble. Total single-family home sales in June were down 37% from a peak reached in July 2005. Home prices in 20 US metropolitan areas fell 15.8% in May from a year earlier.

Aluminium producer Alcoa was one of the top weights on the Dow and fell 2.2%.

On the Nasdaq, shares of Google fell 2.3%.

Hershey dropped 9.4%. The nation’s largest chocolate maker boosted US prices by an average of 10% to help counter rising costs. The company warned that full-year profit would be toward the lower end of its previously forecast range.

General Motors, the largest US automaker, fell 7.3%. Management stated it has not yet seen signs of a recovery in vehicle sales following the recent decline in oil prices.

SanDisk, the biggest maker of memory cards for digital cameras, slumped 10% after analysts recommended selling the stock.

Home Depot, the largest home-improvement retailer, fell 2.1%. Rival, Lowe’s, rose marginally; the company reported a higher-than-expected quarterly profit as US consumers spent tax rebate checks; however, the company forecast third-quarter results below Wall Street estimates.

Amylin Pharmaceuticals slid 13%. The company’s diabetes drug Byetta has been linked to two deaths since an October notice urging precautions, US regulators said.

Other International Markets
European shares fell as easing crude oil prices pared some of the gains in energy shares.

National benchmark indexes decreased in 11 of the 18 western European markets. France's CAC 40 and the UK's FTSE 100 dropped 0.1%, while Germany's DAX lost 0.2%.

Banks were the worst performing sector on the market. Royal Bank of Scotland and Barclays lost 1.8% to 2%. BNP Paribas and Societe Generale fell 1% to 1.1%.

Index heavyweight stocks, Total and Royal Dutch Shell, were up 1.1% and 1.8% respectively, while StatoilHydro rose 3.2%.

The European travel and leisure index and the DJ Stoxx European retail index fell 1.5% and 1.2% respectively. Dutch group Ahold lost 2.6%, Sainsbury fell 1.7%, and Celesio declined 1.4%.Home Retail Group, the owner of UK store chains Argos and Homebase, dropped 2.4%.

Woolworth’s Group jumped 11% after saying it rejected a takeover offer from Iceland Foods because the bid undervalued the company.

Airline stocks retreated: Air France-KLM fell 2%, Lufthansa declined 1.6%, and British Airways shed 3.2%.

The euro’s recovery from six month lows undermined export-sensitive stocks such as auto manufacturers. Daimler fell 1.1%, Volkswagen shed 0.7%, and French rivals, Peugeot and Renault, lost 1% to 1.1%.

The mining sector was lifted by firmer precious metals prices. Anglo American rose 2.1%, Rio Tinto rose 1.7%, and Vedanta rose 0.9%.

Adidas, the world’s second-largest sporting-goods maker, declined 2.4% after analysts downgraded earnings estimates for the company.

UK house prices posted the biggest annual decline since at least 2002 as banks choked off mortgage lending, deepening London's property slump. Persimmon, the UK’s largest homebuilder by market value, sank 5.6%.

Europe's trade deficit widened to the largest level in almost two years in June as a cooling global economy and the euro's gains against the dollar dampened exports. European sales to the US, the second-biggest buyer of the region's goods, have fallen this year as economic expansion there eased. Exports to the US fell 4% in the January-May period. Sales to the UK, the euro region’s largest market, increased 2%.
 

Commodities
Crude oil fell amid signs Tropical Storm Fay will miss rigs and platforms in the Gulf of Mexico, which accounts for about a fifth of US production.

Gold rebounded on speculation investors and jewellers will purchase cheaper supplies of the metal after an 8.4% decline last week that erased all of this year's gains. Silver also rose.

Soybeans surged the most allowed by the Chicago Board of Trade, leading gains for corn and wheat, as the dollar's decline from the highest level in almost six months improved the outlook for US exports.

Soybeans were further boosted following speculation that farmers in Argentina, the world's largest exporter of soy-based feed and vegetable oil, may hold demonstrations today to spur the government to ease export taxes on smaller producers.