Shares of Ford were up 7 percent at $8.58 before the bell after senior company executives said the automaker was on track to post its first monthly sales increase in two years.

In banking news, Barclays PLC reported an 8 percent rise in half-year profit, while HSBC Holdings PLC said its first-half profit halved from a year ago, but the results were better than the analyst consensus forecast.

“The greatest difficulty has been in financials, so the gains in HSBC and Barclays (are) adding to optimism and (suggest) that the worst may be over,” said Andre Bakhos, president of Princeton Financial Group, in New Brunswick, New Jersey.

“It’s comforting to see that we are in a global rebound in earnings.”

The Select Sector SPDR Financial ETF was up 2.2 percent before the bell.

A rise in oil prices was also poised to underpin the broader market, with U.S. front-month crude up 2.4 percent, or $1.65, to $71.10 a barrel.

S&P 500 futures rose 10 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 74 points, and Nasdaq 100 futures were 17.00 points higher.

The rise in U.S. stock index futures suggested that indexes will open up about 1 percent or more. The benchmark S&P 500 <.SPX> could begin trading at a 9-month high, very close to the psychologically important 1,000 level, after registering its best five-month winning streak since 1938 on Friday.

In Europe stocks were up more than 1 percent.

3M Co shares rose 2.4 percent to $72.22 before the bell after Goldman Sachs upgraded the Dow component to “buy” from “neutral.”

Ford, due to report its July sales later in the day, is among the primary beneficiaries of the federal government’s “Cash for Clunkers” incentive program that took effect on July 24.

The Senate on Monday is due to vote on extending the program to stimulate auto sales after the U.S. House approved $2 billion for it on top of an initial $1 billion in June.

The economic calendar includes the Institute for Supply Management’s manufacturing index due at 10 a.m. (1400 GMT). A Reuters poll of economists forecast a July reading of 46.2 from 44.8 in June.

NEW YORK, Aug 3 (Reuters)

The dollar and yen rose as worries persisted about global economic prospects despite a batch of better-than-expected U.S. economic data, prompting investors to seek shelter in the two safe-haven currencies.

Gold climbed to a six-week high after data showed U.S. core inflation rose more than expected in April, boosting the precious metal’s appeal as a hedge against rising prices.

Oil fell toward $56 a barrel, pressured by weak global demand and a stronger dollar.

Europe sank to what may have been the recession’s low point in the first quarter of this year as tumbling German exports and investment plus further sharp drops in output elsewhere hastened the pace of a year-old contraction.

Official GDP estimates showed the period was the worst since records at the European level began in 1995.

“Overall risk appetite is still down because of the bad numbers from Europe,” said Matthew Strauss, senior currency strategist at RBC Capital, in Toronto.

European shares closed higher, with gains for most banks outweighing losses for defensive plays such as telecoms.

But U.S. stocks turned lower after earlier gains due to the expiration of option contracts and a fresh assessment of a jobs report on Thursday that was worse than expected, said Rick Meckler, president of LibertyView Capital Management in New York.

“Yesterday’s rally, given the news, caught people off guard and left the market in a place where no one’s quite sure of the next direction,” Meckler said.

“With the weekend coming up and the potential for weekend news, some people are taking some money off the table,” he said.

Shortly after 1:30 p.m., the Dow Jones industrial average <.DJI> fell 46.43 points, or 0.56 percent, to 8,284.89. The Standard & Poor’s 500 Index <.SPX> shed 8.77 points, or 0.98 percent, to 884.30. The Nasdaq Composite Index <.IXIC> slipped 4.02 points, or 0.24 percent, to 1,685.19.

The FTSEurofirst 300 <.FTEU3> index of top European shares rose 0.5 percent to close at 839.94 points. Over the week, the index fell 3.1 percent, but is up 30 percent from a lifetime low on March 9.

But analysts were skeptical about when, and how strongly, an economic recovery will come through.

“We’ve had a spectacular rally,” said Philip Lawlor, chief portfolio strategist at Nomura. “Risk appetite has rebuilt. The question is about more green shoots.

“I don’t think the data is actually going to turn positive for another six or nine months,” he said.

U.S. and euro-zone government debt slipped after U.S. industry and consumer sentiment reports bolstered hopes the economy might soon start to recover.

U.S. industrial production fell 0.5 percent in April, a more modest pace than in recent months and less than the 0.6 percent economists had expected.

The data dimmed the allure of safe-haven investments such as U.S. Treasuries. Separate reports showing improved national consumer sentiment and a slower rate of contraction in New York state manufacturing this month also trimmed flight-to- safety bids.

The benchmark 10-year U.S. Treasury note fell 16/32 in price to yield 3.16 percent. The 2-year U.S. Treasury note fell 1/32 in price to yield 0.87 percent.

In Europe, June Bund futures fell 53 ticks on the day to 121.17, well off a one-week high of 122.07 set earlier in the session.

The dollar rose against a basket of major currencies, with the U.S. Dollar Index <.DXY> up 0.41 percent at 82.777.

The euro fell 0.80 percent at $1.3524. Against the yen, the dollar was down 1.04 percent at 94.87.

U.S. light sweet crude oil fell $2.06 to $56.56 a barrel.

Spot gold prices rose $4.70 to $930.05 an ounce.

Asian stocks rose as investors bought shares that stand to benefit from an expected global recovery. MSCI’s index of Asia Pacific stocks outside Japan rose 1.7 percent, while Japan’s Nikkei share average <.N225> added 1.9 percent,

May 15 (Reuters)

We don’t know for sure how this latest rally will turn out. But we do know that most of the others were notable for making lower highs and falling to lower lows than the previous dip.

They also were triggered by some sort of positive government action, from the 75 point hike in January to the fiscal package in April to the Citi bailout a couple of weeks ago.

Source: FusionIQ, Bloomberg

That makes Friday’s little spurt upwards different. It was triggered by a slug of bad news… from record highs in job losses, foreclosures and late mortgage payments.

The SPX is once again hitting its 30-day moving average. It has provided firm resistance since September. If it breaks above, we have another rally on our hands. But only time will tell how sustainable it is.

As I said in the article above, I don’t believe it marks a turnaround. But I wouldn’t be surprised by an end-of-the-year rally.

Source: Eight Rallies and Counting

We knew it was going to happen. Heck, we had the canary in the coal mine, the volatility index, investor sentiment, and a host of other technical indicators all screaming it was time to get defensive. And the screams came just in time…

Last week, the Dow Jones Industrial Average, the Nasdaq Composite Index, and the S&P 500 all lost about 3.5%. The semiconductor index was down about 5%. Retail and financial stocks fell more than 6%. Brokers lost 7%. And homebuilders gave up 10%.

The bad news, of course, is it’s going to get worse.

———- Advertisement ———-
Say these TWO Words to Your Broker

If you say 2 simple words to your broker, you could potentially make 3-times more money on every single trade.

Michael Marcus, one of the world’s most famous traders, used it to make an amazing 250,000% on his portfolio in just 10 years. That’s enough to turn a $10,000 stake into $25 million.

This is possibly the single most valuable secret of the investing world…

Click here to learn more.
———————————–

Here’s another look at the monthly chart of the S&P 500 plotted against its 20-month exponential moving average (EMA)…

If the S&P 500 is trading above the line, then stocks are in a bull market. If stocks are trading below the line, then the bear is in charge.

Stocks entered a bear market back in December. The S&P 500 declined for five straight months, and then put on a blistering two-month rally.

Today, the S&P is back up near the line. If history is any sort of a roadmap, then investors are in for a very long summer.

Take a look at what happened in the last bear market. Stocks broke down, rallied back up, and challenged the line… then cascaded lower again.

Get ready for the cascade.

Of course, stocks don’t go straight down. After such a nasty beating last week, stocks should enjoy a brief bounce higher early this week. In fact, the odds look pretty good that we may see the S&P rally back up and test the EMA at about 1,407.

At that point, though, traders ought to look at exiting long positions and adding on a few short sales.

Best regards and good trading,

Jeff Clark

Source: Warning: Trouble Ahead

If the stock acts well, then investors can look forward to strength in the market. And if MER shares struggle, then weakness lies ahead.

I’ve probably made more money trading off the short-term action in Merrill Lynch shares than in any other single technical indicator. So, at least for me, the canary pulls a lot of weight.

———- Advertisement ———-
‘Pilbara Profit Secret’ Turns $5,000 Into $1,025,150 In 4 Years

Starting no later than June 30, 2008, the “Pilbara Profit Secret” could propel SEVEN unknown small caps to stratospheric highs.

It’s already sent one 27 cent stock to $55.63…

Bloomberg reports: “Even the tech boom of the late 1990s pales in comparison…” Read on to get a ‘ground-floor’ piece of the action…
———————————–

Right now, MER is struggling.

Take a look at the following chart, which compares the four-day action in MER with that of the S&P 500…

You can clearly see MER shares have been underperforming the overall stock market… MER is trading higher but is lagging the S&P.

Understand, this isn’t a sign of impending doom. But it is a sign that the market may have a tough time holding on to any further gains. We may see a fairly swift downside move kick off soon.

Friday is option-expiration day, which adds in the potential for volatility. Since we’ve rallied so strongly so far this week, we may be ready for a countermove. Add in the increasingly bullish sentiment among investment advisors (which is best used as a contrary indicator), and we have a pretty compelling case against getting too aggressive on the long side.

In fact, taking a few profits off the long side and making a few short-side bets seems like the best thing to do right now.

Don’t sell your entire portfolio. But you’ve seen some terrific gains since March 27, when I suggested it was time to buy. Judging by the canary, now is a good time to lock in those gains.

Best regards and good trading,

Jeff Clark

Source: The No. 1 Reason to Take Profits Now