U.S. MARKET AVERAGES

The Dow Jones Industrial Average was up 4 points at 10,306. The Nasdaq Composite Index rose 1 point to 2,076 while the S&P 500 Index stood at 1,197.66.

The 10-year benchmark note dropped 1/32 at 100 14/32, with its yield standing at 4.044%.

Commodity stocks gain ground, aluminum stocks in particular, which were lifted by Alcoa's positive earnings.

Semiconductors sector is advancing, while some weakness is seen in insurance sector.

Nanometrics said it now expects 2Q down 20%. Earlier the company had seen revenue to be unchanged to down 10% on a slowdown in the industry due to longer acceptances and shipment delays.

Alcoa Inc. shares surged 4.4% to $27.21 in morning trading as the company's quarterly results overnight opened the second quarter earnings season.

Accenture Ltd. soared 7% to $23.75 after the company posted stronger-than-expected earnings on increasing demand for its services.

Siebel Systems shares slid 1.9% to $8.62 after the software maker warned on 2Q revenue at $312 million to $314 million, failing to meet analyst view of $319.2 million.

Morgan Stanley shares lost 12 cents at $53.22 in early trading.

ECONOMIC NEWS

The Labor Department reported nonfarm payrolls climbed by 146,000 in June, which is better than in May but still disappoints the 200,000 rise expected by economists. The jobless rate declined to 5%, the lowest since September 2001, while analysts had been looking for the unemployment rate to remain at 5.1%. Of 278 industries, 55% were hiring in June, which marks a decline vs. 57% reported in May.

The Commerce Department is scheduled to release the May wholesales inventories report at 10 a.m. Economists expect a 0.5% rise in wholesale inventories for May following a 0.8% increase in April.

The Federal Reserve is to release the consumer credit report for May at 3 p.m., and economists expect a rise of $4 billion in May, following a $1.3 billion jump in April.

INTERNATIONAL MARKET NEWS

Asian markets finished down after gaining in the morning session overcoming the effects of the London terrorist attack but weak Japan machinery order data killed the Japanese index rally and cast a pall across markets in the region. The Nikkei ended down 0.2%, China’s Shanghai Composite lost 2% and Hong Kong’s Hang Seng fell 0.5% dragged down by heavyweight HSB and China Mobile. The dollar was trading at 112.36, up 0.31 yen.

European markets quickly recovered after the confusion caused by the terror attacks in London on sentiment that markets were oversold as well as on Wall Street gains. London’s FTSE 100 rose 0.8% with travel stocks and British Airways among the early gainers, Germany’s DAX 30 added 0.8%, and France’s CAC 40 also climbed 0.8%. The euro and the pound were down 0.3% against the dollar.

ENERGY, METALS AND CURRENCIES MARKETS

Oil prices resumed their higher positions as global financial markets recovered after the London bombings. U.S. crude-oil for August delivery rose 87 cents to $61.60 a barrel and London Brent climbed 93 cents to $60.21 a barrel.

The U.S. dollar strengthened against other major currencies on U.S. non-farm payroll data. The greenback gained 0.4% against the euro to $1.1904, and 0.4% up against the yen to quote at 112.35. The pound fell to a 19-month low and quoted at $1.7370.