GM Leads Dow Drop as Ford Sales Skid

It was a rocky start to the second half for Wall Street as the market digested bleak auto sales, a $2 jump in oil prices and an encouraging reading on manufacturing.

The Dow industrials fell more than 100 points in the first few minutes of trading, plunging the blue-chip index back into bear-market territory then got a boost after the Institute for Supply Management's gauge of manufacturing activity popped above the key 50 mark-- which indicates growth -- in June, snapping four months of contraction.

Ford reported its sales plunged 29 percentin June as sales of its best-selling F-series pickup truck were cut by 41 percent and SUV sales dropped by more than half.

General Motors was the top decliner on the Dow ahead of the auto maker's sales, due out later this afternoon.

Today's gyrations follow the worst first-half of the year since the first half of 1970 on Monday.

Here are a few market tea leaves to chew on today: The Dow industrials have risen on 15 of the last 18 July 1sts. With the way this market is gyrating, anything is possible by the closing bell. And then there's the "Thursday syndrome" as explained by UBS floor manager Art Cashin last week: A huge sell-off on a Thursday followed by a couple days of volatile trading and then capitulation on Tuesday, with a reversal in the afternoon.

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

Stick around. Things could get interesting!

Light, sweet crude shot up more than $2, trading around $142 to $143 a barrel.

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 bubbleand 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.

survived another round of rumors. Watching the investment bank struggle under the attack of short sellers and rumor mongers has felt a little like watching the National Geographic Channel in recent months. Already beaten down, the stock tumbled 11 percent on Monday amid rumors that the brokerage would face an inevitable sale a la Bear Stearns. But shares rebounded 5 percent today, trading above $20 a share, after Morgan Stanley recommended late Monday that investors buy Lehman shares and slapped a $31 price target on the stock.

Among the few brave souls to recommend buying into financials these days, one name that comes up repeatedly is JPMorgan Chase. And, the proof was in the numbers: JPM underwrote more than $147 billion dollars globally in the second quarter, leading Wall Street in the category, according to data from ThomsonReuters data. Citigroup, however, led in terms of fees.

Swiss bank UBS, Europe's biggest casualty of the subprime crisis, failed to calm investors' nerves about writedowns to come and instead shuffled its top management. Shares dropped to a 10-year low.

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; 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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