Futures Point to a Rocky Start as Oil Jumps

It's probaby going to be a rocky start to the second half for Wall Street as a $2 jump in oil prices and selloff in European banks ripples through the market.

The Dow industrials have risen on 15 of the last 18 July 1sts but U.S. stock-index futures pointed to a sharply lower open.

Today's downbeat start follows the worst first-half of the year since the first half of 1970 on Monday.

Asian stocks fell and European stocks were also trading lower as fears of rising oil prices and worries over the fate of banks continued to weigh on the market.

Oil once again looked to be the main mover for the US market, as the price of crude rose more than $2 in early trade and sailed past the $142 a barrel mark.

Some analysts are saying a big-volume selloff might actually benefit the market as it would finally show a bottom and investors would take heart to start buying again.

Disputes on whether the rise in oil prices is caused by supply and demand fundamentals continued, with famous investor Wilbur Ross telling CNBC that the dramatic rise in the price is a bubble and there is no apparent problem with the supply of crude.

But the heads of major oil companies countered the statements that speculation was driving the price, saying supply was a problem.

Also keeping the market on edge is anticipation of two key economic gauge due out today: auto sales and the ISM's national reading on manufacturing.

Some good news started to trickle in the hard-hit financial sector, with Morgan Stanley recommending after the bell Monday that investors buy Lehman shares, setting a price target of $31. Lehman's stock fell nearly 11 percent in the previous session on rumors that it would be bought out well below its current price.

Lehman's stock indicated a higher opening Tuesday, with premarket trading sending shares up about 0.5 percent to $19.95.

Also in the financial sector JPMorgan Chase reigned supreme across global debt and equity underwriting for the last quarter. JP Morgan underwrote over $147 billion dollars globally, but fell behind Citigroup in terms of fees, according to ThomsonReuters data.

Citi shares were off nearly 2 percent premarket to $16.45.

And in Europe, Swiss bank UBS , the continent's biggest casualty of the subprime crisis, introduced new corporate governance measures on Tuesday, including a clear separation of the responsibilities of the board of directors and executive management. But that wasn't enough for investors, as fears of more writedowns pushed shares down 6.9 percent in Switzerland.

In merger and acquisition news, Belgian brewer InBev continued its courtship for Anheuser-Busch , saying it held to its existing price of $65 per share in cash because it represented the full and fair value of the company despite weak stock markets.

This Week:

TUESDAY: Auto sales; ISM manufacturing index; construction spending; Fed's Lockhart speaks; Earnings from Apollo Group after the bell
WEDNESDAY: Weekly mortgage applications; factory orders; crude inventories; earnings from Family Dollar
THURSDAY: Jobless claims, Jobs report, ISM services index; Stock market closes at 1pm ET and bond market closes at 2pm ET
FRIDAY: All major U.S. markets closed for Fourth of July holiday

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