U.S. MARKET AVERAGES

Rising oil is likely to keep investors on edge in the coming week along with expectations for the July jobs report, due Friday.

The rise in the 10-year bond yield will also be in the spotlight, after it increased from 3.92% on the last trading day of June to 4.27% Friday. If the yield continues to increase, that would undoubtedly provoke concerns about the impact on housing and the economy.
Inflation concerns are likely to remain, particularly ahead of the August 9 Federal Reserve policy-setting meeting.

But even with all these challenges, the tone of the stock market remains remarkably upbeat, analysts say, with investors continuing to bet on a stronger second half of 2005.

About 12% of S&P 500 companies are due to post their earnings this week, including Dow member Procter & Gamble and media companies Time Warner, Comcast and Viacom.

2Q earnings are expected to rise 11.1% vs. the comparable quarter last year, beating expectations of an increase of 7.4%.

69% of the companies had posted better-than-expected earnings as of Friday, and around 15% had reported earnings that either met or missed forecasts.

ECONOMIC NEWS

The Institute for Supply Management is scheduled to release the July manufacturing report at 10:00 a.m. Monday. Economists expect a reading of 54.0 for the ISM manufacturing index in July versus 53.8 in June.

The Commerce Department is due to report on construction spending at 10:00 a.m. Economists expect construction spending up 0.8% in June, versus a 0.9% decline in May.

The release of the July employment report due Friday will be the major highlight of this week's economic calendar. Economists are expecting the U.S. economy to have created 179,000 jobs in July, up versus 146,000 in June. The jobless rate is seen to remain unchanged at 5%.

INTERNATIONAL MARKET NEWS

Asian stock markets were generally higher Monday, shrugging off U.S. losses, weaker-than-expected economic reports and increasing crude oil prices.

Tokyo's Nikkei 225 was up 0.33% by mid-afternoon to 11,939.39, helped by positive corporate earnings from Komatsu Ltd., which added 6.41%, and NTT DoCoMo Inc. which gained 4.6%.

Sydney's S&P/ASX 200 bounced back from the early losses to add 0.01% to 4,389.20, while Seoul's Kospi reversed early losses to add 0.23% to 1.13.83. Taipei's index added 0.02% to 6,313.03 and Hong Kong's Hang Seng gained 0.20% to 14,910.06. Among the decliners, Manila shed 0.62% to 1,987.80, Singapore lost 0.13% to 2,349.52.

European markets were higher Monday, with rising oil stocks in the highlights after the early wire releases that King Fahd Bin Abdul Aziz of Saudi Arabia has died. Front-dated crude touched $61.11 a barrel, fueling oil companies, but driving airlines and some automakers lower in early Monday trade.

Germany's DAX 30 index gained 0.3% to 4,902.46, France's CAC 40 advanced 0.2% to 4,451.7, while the U.K.'s FTSE 100 index added 0.1% to 5,288.90.

ENERGY, METALS AND CURRENCIES MARKETS

Crude oil prices briefly jumped above $61 a barrel on Monday after Iran threatened to restart its nuclear enrichment program. Mid-afternoon in Singapore, light, sweet crude for September delivery added 21 cents to $60.78 on the New York Mercantile Exchange, after jumping to a session high of $61.02 in Asian trading Monday. The contract had reached $61.05 Friday, its highest level in more than two weeks, before ending at $60.57, up 63 cents.

September Brent futures at London's International Petroleum Exchange opened 48 cents up at $59.85 a barrel, before sliding back to $59.60.