A.M. MARKET UPDATE 08.31.09CHINESE STOCKS LOSE 6%

EUROPEAN INDEXES ALSO DOWN
REUTERS: Chinese stocks sank 6% to a three-month low on Monday, weighing on Asian stocks and sapping investor willingness to put money at risk . . . Major European stock futures fell 0.9%, following commodity prices lower, in trade thinned by a holiday in London. U.S. stock futures fell 0.6% and U.S. Treasury futures were up 0.2% . . . READ MORE

NEW YORK TIMES: The Shanghai composite index plunged 6.75 percent on Monday to close out August with a drop of 21.8 percent, the worst performance for the month among the world's major exchanges. Monday’s fall, coupled with a drop of nearly 3 percent last Friday, has made for "a huge, huge decline," said Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong . . . READ MORE

WALL ST. SELLOFF FORECAST
CNN/MONEY: U.S. stocks were poised to tumble Monday morning, after another sharp fall in Chinese stocks knocked back investor confidence. At 6:20 a.m. ET, the Dow Jones industrial average, Nasdaq 100 and Standard & Poor's 500 futures were sharply lower . . . READS MORE

SEPTEMBER SWOON NEARS
BUSINESS TIMES: The latest phase of the six-month long US stock market rally has shown remarkable resilience, as momentum driven trading continues to defy arguments that stocks are now overvalued by as much as 25 per cent. But the calls for the rally's demise are growing with the first trading session of September looming tomorrow . . . READ MORE

U.S. UNEMPLOYMENT WORRIES
ASSOCIATED PRESS: The most anxiously awaited piece of data his week is the government's employment report. . . . Economists surveyed by Thomson Reuters expect another 220,000 jobs were lost in August, down from 247,000 in July. Any disappointments when Friday's report comes out, and investors' faith in the economy -- and in the bets they've placed since early March -- may be shaken . . . READ MORE

FORBES: The employment report comes out Friday morning and economists expect a loss of 225,000 jobs in August . . . Traders are anxiously watching unemployment, which has remained stubbornly high . . . READ MORE

DOW TREND:

• FRIDAY AUG. 28: -36.43
• WEEK AUG. 24-28: +194.15
• MONTH JULY 28-AUG. 28: +447.48

OIL: RECOVERY QUESTIONS
ASSOCIATED PRESS: Oil prices fell to near $71 a barrel Monday as China's stock market tumbled and commodities investors questioned whether the U.S. economy can recover strongly in the second half . . . READ MORE

BANKING: CRISIS FORECAST?
MARKET ORACLE: The markets appear to be anticipating a banking crisis . . . Long term charts are pointing to the increasing probability that confidence in the integrity of the commercial banking system has been eroding . . . READ MORE

BONDS: INVESTORS SEEK SAFETY
BLOOMBERG: Treasuries rose, heading for their first two-month gain this year, as Chinese stocks fell and investors added to bets the global financial crisis will slow the pace of inflation . . . READ MORE

BUSINESS: CAL. PUBLISHER BANKRUPT
NEW YORK TIMES: Freedom Communications, owner of The Orange County (Calif.) Register and 30 other daily newspapers, is expected to file for bankruptcy this week under a plan that will hand its publications to its lenders . . . The Orange County Register had an average weekday circulation of 230,877 and Sunday circulation of about 300,000 for the six months ended on March 31. The company also owns several broadcast stations nationwide . . . READ MORE