Merrill Lynch & Co., the opinion that the brokerage could be forced to raise more capital in the wake of what is expected to be a fourth consecutive quarterly loss weighs on its stock price.

A Credit Suisse analyst downgraded shares of the Finland-based phone maker Nokia Corp to "Neutral" from "Outperform" predicting it will have trouble maintaining its share of the smartphone market.

Fitch Ratings raised the ratings outlook on the Irving, Texas-based natural resources company Pioneer Nat Res Co to "Stable" from "Negative," citing the oil and gas company's low debt levels and growing cash flow. Fitch expects the company to further build its cash through significant production growth and the continued rise in prices for oil and natural gas.

Accenture Ltd., the world's second-largest technology-consulting firm posted a 36% increase in third-quarter profit and upped its annual forecast after on an uptick in outsourcing jobs.

Larger gains seen earlier continue to get pared as the financial sector goes back on the defensive.
Currently, the financial sector is down 1.7% for the session, after being down just 0.3% less than two hours ago. At its worst level today, which was reached shortly after 10:00 AM ET, the financial sector was down 2.0%. That was roughly the same time the S&P 500 hit its lows for the session, making it clear that the sector is playing a leading role in driving the market.
Separtately, we have also seen the consumer discretionary sector (-0.5%) retreat into negative territory in recent trading as oil prices have bounced back from a bout of selling interest. Crude futures are currently up 0.9% at $141.47 per barrel.

The stock market has moved a bit lower from earlier levels, but gains remain healthy. Strength continues to be exhibited by the more defensive sectors. Telecom is sporting the largest session gain, currently up 2.1%, followed by utilities, which is up 1.9%.
Auto manufacturers are trading lower ahead of the June auto sales, due tomorrow. The automobile manufacturing index is down 3.7% this session.

The euro reversed its gain against the dollar today after approaching the high end of the $1.53-$1.5850 range in which it has traded in June, according to Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut.
``We have reached the top of the recent range,'' said Ruskin. ``People don't want to get carried away too much before the European Central Bank meeting this week.''
The ECB is expected by economists to raise its 4 percent main refinancing rate by a quarter-percentage point on July 3, the same day a government report is forecast to show the U.S. lost jobs in June for a sixth month.
The inflation rate in the countries that use the euro accelerated to 4 percent, from 3.6 percent in May, the EU statistics office in Luxembourg said. The ECB tries to keep consumer-price growth below 2 percent.
``There's a lot of trepidation about how the payrolls and the ECB rhetoric will play out,'' said Stephen Malyon, co-head of currency strategy at Scotia Capital Inc. in Toronto. ``The downside risk to the U.S. economy is growing. That's something that unnerves the market.''
Futures on the Chicago Board of Trade show a 25 percent chance that the Federal Reserve will raise the 2 percent target rate for overnight lending between banks by a quarter-percentage point on Aug. 5, compared with 40 percent odds a week ago.
``The sentiment is negative for growth in the U.S.,'' said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut. ``I would play the weak dollar through the yen. The stress of the financial markets will keep the safe-haven currencies, such as the yen and the Swiss franc, supported.''
The Chicago PMI, a regional read on manufacturing, rose to 49.6 from 49.1 in the previous month, versus forecasts for a dip to 48. However, any reading below 50 indicates continued weakness in the sector.

The stock market continues to trade with solid gains. The S&P 500 is currently up 0.8% this session, while the Dow Jones Industrials has advanced 0.7% in Monday's action. The Nasdaq, however, is underperforming, posting a modest advance of 0.1% this session.
Weakness in the Nasdaq is primarily focused around its banking components, which feature names like Huntington Bancshares (-0.19) and Popular Inc (-0.38).

JPM notes while the Chicago PMI strengthened marginally in June but failed to break above 50 while the Milwaukee PMI and Dallas Fed manufacturing index both declined. "With the exception of the Chicago PMI every regional index has dropped between May and June, and as such we continue to expect the ISM manufacturing index to fall to 48.5 from 49.6,"JPM says.

Major indexes struggle as investors consider higher fuel prices and weak auto stocks in the final session of 2008's first half.
Stocks were mixed Monday morning as investors weighed another selloff in auto and financial stocks, record oil and gas prices and some opportunities to scoop up recently-battered shares on the last day of the first half.
The Dow Jones industrial average added a few points around an hour into the session. The broader Standard & Poor's 500 index gained 0.4% and the tech-heavy Nasdaq composite was little changed.
Stocks tumbled last week on a combination of record-high oil prices, a weak dollar and more financial market woes. Stocks were choppy Monday morning.
The selloff last week briefly sent the Dow to a level at least 20% below the October highs, meaning it met the technical definition of a bear market. The S&P 500 is near bear levels. The Nasdaq hit the technical definition of a bear market in March, falling 24% off its October highs, but has partially recovered since then.
General Motors tumbled 5% and Ford Motor lost 6% as investors continued to dump the stocks amid rising fuel prices. Both companies report June sales Tuesday and are expected to report big declines.
Manufacturing remains under pressure. The Chicago PMI, a regional read on manufacturing, rose to 49.6 from 49.1 in the previous month, versus forecasts for a dip to 48. However, any reading below 50 indicates continued weakness in the sector.
Oil hits new record. U.S. light crude for August delivery reached a record high of $143.67 a barrel on the New York Mercantile Exchange before pulling back to trade at $142.14 a barrel, up $1.93.
H&R Block reported improved quarterly sales and earnings that topped estimates, thanks to a strong tax season and the sale of its mortgage unit. Shares jumped 7%.
Anheuser-Busch said it's cutting 10% to 15% of its workforce and that it expects 2008 and 2009 earnings per shares that are higher than analysts' current forecasts. The parent of Budweiser beer is trying to make itself more valuable than the $65-a-share offer from InBev it rejected last week. Shares were little changed Monday.

The S&P 500 has made its way back into positive ground and is challenging the morning's best level. The Dow Jones Industrials Average is now up moderately, while the Nasdaq is at the unchanged marek.
Schlumberger (+1.81) and ConocoPhillips (+2.00) are the two primary leaders in the S&P 500 this session. Losers include JPMorgan Chase (-0.55) and Citigroup (-0.50).
Announced at 9:45 AM ET, the Chicago Purchasing Managers Index, a regional manufacturing report, came in at 49.6 for June. Economists were expecting a reading of 48.0.

After making a nice jump shortly after opening bell, selling pressure has resumed to undercut the morning's progress. The major indices have surrendered all their early gains.
Shares of auto makers are being hit hard. Ford Motor Company (-0.45) and General Motors (-0.68) are both falling to new 52-week lows.

EUR/USD $1.5700
USD/JPY Y105.00, Y106.00
AUD/USD $0.9525
NZD/USD $0.7525

Futures continue to indicate a mixed start to the week's opening session (S&P futures +2.0, Nasdaq futures-3.5)
H&R Block announced a positive sales and earnings per share surprise for its most recent quarter. Meanwhile, Campbell Soup sees 2008 full-year earnings per share results growing at the upper end of its 5% to 7% range when compared with prior year results.
Oil is trading hands at more than $142 per barrel in early electronic trading.
Anheuser-Busch, which has become the target of InBev, disclosed it is trimming its workforce by 10% to 15%.

Sterling gains a general boost with cable jumping back up to $1.9955, from below $1.9900, as euro-sterling breaks below support at stg0.7910, trading below stg0.7900 but holding shy of restsing strong support between stg0.7895/90. Cable offers remain in place to $1.9970 with stops above, which if triggered seen opening a mov eon toward $1.9985. Offers noted from this level toward stronger resistance at $2.0000 (61.8% $2.0399/Mar14 to $1.9361/May14). Weak talk suggesting an option barrier at $2.0000, but no confirmation found from normal, reliable sources.

The dollar fell to a three-week low against the euro before reports this week that may show declines in payrolls and manufacturing, limiting the Federal Reserve's scope to reverse seven interest-rate cuts since September.
The U.S. currency stayed lower even after U.S. Treasury secretary Henry Paulson reiterated in a radio interview in Moscow that a ``strong'' dollar is in the nation's interests.
U.S. nonfarm payrolls shrank by 60,000 workers, according to a Bloomberg survey before the Labor Department's report on July 3. That would follow a decline of 49,000 in May.
The Institute for Supply Management's factory index due tomorrow fell to 48.6 in June from 49.6 in May, a separate survey showed. A reading below 50 signals contraction.
``U.S. economic data simply don't support the case for a rate hike,'' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. ``With the ECB likely to raise rates, that makes the euro seem more attractive.''
The dollar may slip to 106.10 yen and $1.5840 per euro today, he said.
Futures on the Chicago Board of Trade show a 25 percent chance that the Fed will raise the target rate for overnight lending between banks by a quarter-percentage point to 2.25 percent on Aug. 5, compared with 40 percent odds a week ago.
The euro was supported by a report today that showed consumer-price increases accelerated in June, allowing ECB President Jean-Claude Trichet to raise interest rates.
The inflation rate in the euro area rose to 4 percent, from 3.6 percent in May, the European Union statistics office in Luxembourg said. ECB aims to keep consumer-price growth below 2 percent.

EUR/USD: traded within $1.5770-$1.5815. After the failed test of $1.5835/40 the pare fell back to $1.5745. Bids $1.5720. Offers remain on approach to $1.5835. stronger at $1.5840/50.
GBP/USD: was bounded by $1.9925/65 before lowered to $1.9900. Offers remain in place above $1.9950, with interest extending toward $1.9965. Above here andthe $2.0000 levelsmoves into view, with strong offers noted around. Bids between $1.9900/1.9895, with stops placed onbreak ofbreak here to open a deeper pullback toward $1.9860/50.
USD/JPY: due to carry trades reduction and general US dollar pressure from Y106.40 reached Y105.00 before bounced back to Y105.50.

Euro under pressure after the rate had posted highs during the morning at $1.5835. Euro-dollar bids $1.5775/70 have been filled, stronger demand spotted at $1.5750 ahead of stronger level at $1.5720. Offers noted from the earlier high at $1.5836, with interest strengthening into $1.5840/50.

EUR/USD $1.5700
USD/JPY Y105.00, Y106.00
AUD/USD $0.9525
NZD/USD $0.7525

The dollar fell to a three-week low against the euro before reports this week that may show declines in payrolls and manufacturing, limiting the Federal Reserve's scope to reverse seven interest-rate cuts since September.
The U.S. currency stayed lower even after U.S. Treasury secretary Henry Paulson reiterated in a radio interview in Moscow that a ``strong'' dollar is in the nation's interests.
U.S. nonfarm payrolls shrank by 60,000 workers, according to a Bloomberg survey before the Labor Department's report on July 3. That would follow a decline of 49,000 in May.
The Institute for Supply Management's factory index due tomorrow fell to 48.6 in June from 49.6 in May, a separate survey showed. A reading below 50 signals contraction.
``U.S. economic data simply don't support the case for a rate hike,'' said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. ``With the ECB likely to raise rates, that makes the euro seem more attractive.''
The dollar may slip to 106.10 yen and $1.5840 per euro today, he said.
Futures on the Chicago Board of Trade show a 25 percent chance that the Fed will raise the target rate for overnight lending between banks by a quarter-percentage point to 2.25 percent on Aug. 5, compared with 40 percent odds a week ago.
The euro was supported by a report today that showed consumer-price increases accelerated in June, allowing ECB President Jean-Claude Trichet to raise interest rates.
The inflation rate in the euro area rose to 4 percent, from 3.6 percent in May, the European Union statistics office in Luxembourg said. ECB aims to keep consumer-price growth below 2 percent.

Resistance 3: Chf1.0350
Resistance 2: Chf1.0300
Resistance 1: Chf1.0220
Current price: Chf1.0156
Support 1: Chf1.0130
Support 2: Chf1.0020
Support 3: Chf0.9950

Comments: The nearest support at today'sChf1.0130 (50% Chf0.9650-Chf1.0620) and Chf1.0020 (61.8% Chf0.9650-Chf1.0620).Resistance comes at former support around Chf1.0220, break above to open a way to Chf1.0350. Further level comes on Chf1.0430.

WTI Nymex crude oil came within 5 cents of record high hit on Friday at $142.99, amid dollar weakness and geopolitical tensions in Middle East. August contract is now at $142.57, up $2.36.

Resistance 3: $2.0190
Resistance 2: $2.0020
Resistance 1: $1.9950
Current price: $1.9945
Support 1: $1.9800
Support 2: $1.9660
Support 3: $1.9580

Comments: The pare retains positive mood and trades near resistance spotted at $1.9950 (upper bound of the rising channel since June 13). A break above the latter level to open the way for a test of $2.0000/20 area. The nearest support is $1.9800 (50% of the resent rally). A break under will open the way to $1.9670/60 (June 25 low) and Monday low at $1.9580.

Resistance 3:$1.5950
Resistance 2: $1.5900
Resistance 1: $1.5840
Current price: $1.5815
Support 1: $1.5720
Support 2: $1.5650
Support 3: $1.5460
Comments: The nearest resistance comes at June highs $1.5840. Stronger level is around $1.5900. The closest supports are $1.5720and $1.5630. The stronger one comes at on $1.5540 with a break under will open the way to $1.5460 (last week low).

EUR/USD
Bids: $1.5800, $1.5775/70, $1.5750, $1.5720.
Offers: $1.5840/50, $1.5900.

GBP/USD
Bids: $1.9850, more at $1.9810/00
Offers: $1.9950/65 and $2.0000

EUR/JPY
Bids: Y165.75/65, Y165.00
Offers: Y167.00/05, Y168.50/60

Coming aggressively lower, as traders note cross yen sales adding weight with option interests at Y105.00 are now in focus. Stops at risk at Y104.90 and Y104.70, traders say, with demand then noted at Y104.50/45.

--BOE May Net Consumer Credit Up Stg1.376Bn Vs Stg1.122Bn April
--BOE May Net Mortgage Lending Stg4.073Bn Vs Stg6.151Bn April
--BOE Final May M4 Up 0.4% m/m; Up 10.0% y/y
--BOE: UK May M4 Lending 0.2% m/m; Up 11.3% y/y

The yen rose agains US dollar and pared its biggest quarterly decline against the euro in five years, after Moody's Investors Service raised Japan's local-currency debt rating.
The yen pared a daily decline of as much as 0.3 percent after Moody's said Japanese banks had avoided the worst effects of the credit crisis. The yen also reversed losses against the Australian dollar and the British pound on speculation stock losses in Tokyo will spread to Europe, prompting a reduction in purchases of higher-yielding assets funded with Japan's currency.
`Some people in Europe are taking advantage of the Moody's news to buy the yen,'' said Akio Shimizu, chief manager of foreign exchange trading at Mitsubishi UFJ Trust & Banking Corp. in Tokyo. ``Sentiment is leaning toward yen buying as traders look to reduce risk. People wary of stocks may also buy yen.''

EUR/USD: traded within $1.5770-$1.5815 range.
GBP/USD: was bounded by $1.9925/65.
USD/JPY: due to carry trades reduction and general US dollar pressure from Y106.40 reached Y105.50.

Resistance 3: Y108.40
Resistance 2: Y107.20
Resistance 1: Y106.50
Current price: Y105.52
Support 1: Y105.50
Support 2: Y104.50
Support 3: Y103.80

Comments: Below Y105.50, support is around Y104.50. Lower correction may reach Y103.80. Above Y106.50 and Y107.20 resistance comes at yesterday's peak of Y108.20. Rise above may extend Y108.50/60.

Resistance is at record high at $142.99 hit on Friday.

Resistance 3: Chf1.0350
Resistance 2: Chf1.0300
Resistance 1: Chf1.0220
Current price: Chf1.0156
Support 1: Chf1.0150
Support 2: Chf1.0050
Support 3: Chf0.9950

Comments: The nearest support at today's lows Chf1.0160/50. Lower comes Chf1.0130 (50% Chf0.9650-Chf1.0620) and Chf1.0050.Resistance comes at former support around Chf1.0220, break above to open a way to Chf1.0350. Further level comes on Chf1.0430.

Resistance 3: $2.0190
Resistance 2: $2.0020
Resistance 1: $1.9950
Current price: $1.9945
Support 1: $1.9800
Support 2: $1.9660
Support 3: $1.9580


Comments: cable posted serious gains. The pare retains positive mood and trades near resistance spotted at $1.9950 (upper bound of the rising channel since June 13). A break above the latter level to open the way for a test of $2.0000/20 area. The nearest support is $1.9800 (50% of the resent rally). A break under will open the way to $1.9670/60 (June 25 low) and Monday low at $1.9580.

"The data (industrial orders) is likely to reinforce the ECB's belief that the euro zone's economy is fundamentally sound and that it can press ahead with raising its key interest rate from 4 percent to 4.25 percent at its 3 July meeting to try to ensure that current elevated inflationary levels and pressures are not sustained over the medium term."

Resistance 3:$1.5900
Resistance 2: $1.5840
Resistance 1: $1.5820
Current price: $1.5790
Support 1: $1.5720
Support 2: $1.5650
Support 3: $1.5460

Comments: The nearest resistance comes at $1.5820, then – at June highs $1.5840. Stronger level is around $1.5900. The closest supports are $1.5720and $1.5630. The stronger one comes at on $1.5540 with a break under will open the way to $1.5460 (last week low)

- May sa real wholes sales -0.9% m/m; nominal -0.7% m/m
- Jan-May real wholesale sales +3.9% y/y; nominal +10.0% y/y

05:00 Japan Housing starts (May) Y/Y - -8.7%
05:00 Japan Construction orders (May) Y/Y - -8.4%
08:00 Italy PPI (May) - 0.4%
08:00 Italy PPI (May) Y/Y - 6.3%
08:30 UK M4 money supply (May) final - 0.4%
08:30 UK M4 money supply (May) final Y/Y - 10.0%
08:30 UK M4 lending (May) final, bln - +4.8
08:30 UK Consumer credit (May), bln +1.0 +0.9
09:00 Italy CPI (June) preliminary - 0.5%
09:00 Italy CPI (June) preliminary Y/Y - 3.6%
09:00 Italy HICP (June) preliminary Y/Y - 3.7%
09:00 EU(15) Harmonized CPI (June) Y/Y preliminary 3.8% 3.7%
13:45 USA Chicago PMI (June) 49.0 49.1
23:50 Japan BoJ Tankan survey (Q2) 3 11