4:00PM NY, 10:00 PM Frankfurt, 1:30AM Mumbai – Global Markets

Yields edged lower on 10-year U.S. bonds and closed at 5.01% and 30-year bond rose to close at 5.12%.

Crude oil advanced 41 cents to close at $71.09 per barrel, natural gas was unchanged and closed at $6.78 per mBtu, and gasoline futures gained 0.59 cents to close at 224.87 cents per gallon.

Gold gained $8.30 to close at $659.20 per ounce, silver gained 29 cents to close at $12.76 per ounce, and copper futures gained $26 to close at $7,647 per metric ton.

In New York trading, manufacturing survey lifted market sentiment in the morning trading supported by several deal related news. The average rose in the morning trading but faced heavy selling pressure at mid-afternoon and recovered as market neared close as bond yields fell. Multi-billion dollars worth of deals were announced in utilities, telecom, media and consumer products.

A private read on manufacturing orders suggested that orders in June rose showing that manufacturing is likely to remain robust and help the economic growth to maintain steady pace. The ISM manufacturing index in June rose to 56 from 55 in May.

Bell Canada, widely known as BCE agreed to be acquired by a group of investors led by Ontario Teachers Pension Plan for $48.5 billion including minority shareholders, preferred stocks and debt of $15.9 billion. The offer per share is Canadian $42.5 per share. AT&T agreed to buy Dobson Communications, a mobile telephone service operator, in $2.8 billion. Carlyle Group is reported to offer at least $33 per share for Virgin Media. The British cable operator has been rumored for an acquisition for months now but no deal had emerged. Reddy Ice Holdings (FRZ: chart) for cash of $1.1 billion or $31.25 per share. Dominion Resources agreed to sell its oil and natural gas exploration in Mid-Continent basin to Linn Energy for $2.05 billion and completed its gulf of Mexico operations to Italian energy company Eni for $4.73 billion.

Industrial companies led the market rally in the hope of better than expected earnings. Caterpillar (CAT: chart) jumped $$2.19 or 2.8%, United Technologies rose $1.40 or 2%, and Honeywell (HON: chart) gained 81 cents or 1.44%. Charles Schwab (SCHW: chart) jumped 7% on the news that the company plans to buyback $3.5 billion of its own stock. Broker upgrades of Archer Daniels Midland (ADM: chart) and Costco (COST: chart) lifted stocks.

Latin American markets closed higher led by 2% gain in Argentina followed by 1.8% rise in Brazil and 0.9% advance in Mexico and Chile. Latin market jumped on the strength in the New York trading and falling U.S. bond yields. Mexico debt rating was revised to positive from stable lifting the currency, bond and stock market. Separately Pemex assigned the first oil drilling contract to a private company to halt falling oil production.

In Mexico City trading, stocks advanced on positive market mood in New York and countrly outlook revision from Standard’s & Poor. A day after large companies faced a wave of sell-off on the worries that a presidential plan is likely to boost taxes for Cemex and Groupo Televisa. Cemex and American Movil gained nearly 1% but Homex, Telmex and Grupo Televisa jumped a fraction. Wal-Mart de Mexico jumped nearly 1.5%.

In Sao Paulo trading, stocks gained 1.8% led by miners, banks and local home builders. Petrobras led the gainers with a rise of 4% after trading on split adjusted basis in New York trading. CVRD advanced a 3.5%. TAM recovered with a gain of 2% and GOL Airlines dropped a fraction on oil crossing $71 per barrel.

Asian Markets closed higher led by 2% rise in Thailand followed by 1.6% gain in South Korea and 1.2% increase in Indonesia. Pakistan closed up 1% after rallying 37%, second best performing market in the world for the first half 2007 on steady foreign direct investments.

In Japan trading, export houses led by 3% surge in Mitsui helped Tokyo to recover from losses in real estate stocks. Tokyo closed up 0.04%. Tankan quarterly survey of businesses released by Bank of Japan showed a desire to increase capital spending by corporations. Japan Steel Works surged 5% and Sumitomo Heavy Industries gained 3.3% on the news. Mitsubishi Estate fell UFJ Financial Corp and Mizuho Financial group raised mortgage rates by 0.25%.

In South Korea trading, brokerage and construction industries stocks led the charge on optimistic economic outlook released by government. Posco, Korean steelmaker, jumped 3% on the news that the company is seeking technology and operational alliance with Arcelor Mittal. Daewoo Securities and Samsung Securities jumped 11%.

Petroleum refineries and import companies around the region gained on oil trading at $70 per barrel. PTT in Thailand gained 3%, Caltex in Australia gained 1.8%, and Singapore Petroleum jumped 1%.

In Shanghai trading, CSI 300 index fell 0.2% on a report that showed a decline in new brokerage account opening in May and June. Average daily new accounts openings have fallen to 147,000 from 440,000 in May according to China Securities Depository and Clearing Corporation.

In Mumbai trading, Sensex 30 rose a fraction to close at a record high of 14,664. The broker upgrade of Bharti Telecom and Reliance Communication helped the telecom sector stocks. Trade deficit in May grew to $6.22 billion from $4.26 billion in April on 26% rise in exports and 18% increase in imports. Kamal Nath, Minister of Commerce and Industry, said that country is likely to receive $30 billion in foreign investment in the fiscal 2007 on strong fund flows in stock market and property investments. Maruti reported 24% rise in automobile sales, sixteenth monthly gain, on new auto models lifting company stock 6%. Tractor and utility vehicle maker, Mahindra & Mahindra reported 52% rise in sales, lifting the company stock 1.8%.

1:00PM NY, 5:00 PM Frankfurt European markets lost ground amid weakness in the travel and auto sector.
European stock markets lost ground at the start of the third quarter, weighed down by weakness among oil-sensitive airlines and autos and Britain's terror-alert level raised to ‘critical’. Of airlines, shares of British Airways lost 1.4%, easyJet declined 1.9%, while Air France-KLM shares fell 0.7%. In the automotive sector, Renault and BMW each lost more than 0.5% as oil prices neared $70 a barrel. Daimler shares slipped 0.3%.
Ahead of interest-rate decision by the ECB and the BoE later this week, the U.K.'s biggest property developers, British Land dropped 1.9% while shares in German insurance giant Allianz fell 2.1%.
On the positive side, French food group Danone rose 1.6% amid speculation that it is planning to sell its biscuit and cereal lines. The U.K. FTSE 100 lost 0.3% at 6,590.60, while the German DAX declined 0.6% at 7,958.24 and the French CAC-40 fell 0.5% at 6,026.95.

11:30AM Market averages rallied, supported by strong manufacturing growth in June and deal news.

U.S. stocks rallied in a light trading session, as data showing faster growth in the manufacturing sector as well as fresh merger news generated positive sentiment at the start of Q3. Following the upbeat report, shares of large industrial companies Caterpillar and Honeywell rose 2% each.