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Stocks rallied Monday after a pair of encouraging reports on the manufacturing sector.
Stocks had gotten a quick pop at the open after some strong bank earnings out of Europe and expectations that auto sales will show a boost from the "Cash for Clunkers" program. But the rally quickly fizzled until the 10am reports, which juiced the rally.
This came after stocks rose 1 percent last week, boosted by Friday's GDP surprise and encouraging regional reading on manufacturing.
The Institute for Supply Management reported its gauge of manufacturing activity rose to 48.9 in July from 44.8 in June. Economists had expected a reading of 46.5. A measure of new orders jumped to 55.3, an encouraging indication of future activity as anything over 50 indicates expansion.
A separate report showed construction spending rose 0.3 percent in June — economists had expected a 0.6-percent drop.
July car sales don't come out until later, but Ford [F
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] shares shot up 10 percent after the automaker told the Wall Street Journal it will post its first year-over-year increase in almost two years.
Other automakers are expected to show a significant boost from the "Cash for Clunkers" program, which is running out of cash and may have to be suspended if the Senate doesn't approve a bill to give the program an additional $2 billion in funding.
Energy stocks got a boost as oil soared above $71 a barrel.
Apple [AAPL
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] and Google [GOOG
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] were in the spotlight this morning after Google CEO Eric Schmidt resigned from Apple's board.
Among early movers, Dow component 3M [MMM Loading... ()] gained after Goldman Sachs upgraded the stock to "buy" from "neutral."
Goldman Sachs [GS
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] shares rose despite a report that showed the investment bank's reputation has been damaged, among both the general public and financially sophisticated Americans.
Results from Barclays and HSBC helped buoy the banking sector, with UBS [UBS Loading... ()] also gaining on the likelihood it would not pay a fine to settle its dispute with the US government over Americans suspected of trying to evade taxes by using Swiss accounts.
Later this week we'll get reports on the services sector, personal spending, chain-store sales and the big finale: The July jobs report on Friday.
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