Investors took heart from new data that seems to show that manufacturing sectors in the U.S., China and elsewhere have seen the worst of the crisis. The Institute for Supply Management reported on July 1 that its index of U.S. manufacturing activity climbed to 44.8 in June, from 42.8 in May (any reading below 50% indicates contraction). In China, an official purchasing manager’s index, an equally important barometer of economic activity, rose for the fourth month in a row in June. Britain and the euro zone also showed some improvement, although overall European manufacturing remain in contraction mode.

The various reports bolstered stocks on three continents. The FTSE 100 closed up more than 2%, while the Shanghai index rose 1.65%. Stateside, the Dow was up nearly 1% in afternoon trading in New York, while the S&P rose three-quarters of a percentage point.

Source: Wall Street Journal

Mixed Picture of the U.S. Jobs Market

With the official unemployment rate for June due out tomorrow, all eyes today were on two private-sector jobs reports. Data from ADP Employer Services showed that companies cut 473,000 jobs in June—a smaller number than in the previous month, but higher than economists had been expecting. Meanwhile, placement firm Challenger, Gray & Christmas said that announced layoffs fell 9% for the month, to 74,393—the lowest figure in more than a year. Tomorrow’s Labor Dept. report is expected to show that unemployment last month climbed to a 26-year high of 9.6%.

Source: Bloomberg

U.S. Mortgage Applications Plummet

The Mortgage Bankers Association reported on July 1 that its index of applications to purchase a home or refinance an existing home loan fell 19% in the week ended June 26 from the prior week—the biggest drop since February. Although rates on 30-year fixed-rate mortgage have edged down a bit in the last couple of weeks, they remain lodged above 5%. Economists are worried that rising rates will delay a housing market recovery.

Source: Bloomberg

Wal-Mart Supports Employer-backed Healthcare

U.S. mega-retailer Wal-Mart on June 30 told federal authorities it supports requiring employers to provide health insurance to workers. The company’s support could give momentum to one of the most-contentious aspects of legislation taking shape in Congress to fix the U.S. health system.

Source: Wall Street Journal

California to Set Own Auto Emissions Targets

The U.S. Environmental Protection Agency on June 30 granted California’s request to set its own limits on greenhouse gases from autos. The move represents a long-sought victory for the state, but may have limited impact because the federal government has pledged to impose national limits. California can now impose a limit on the emissions from new cars, when no such rules now exist in federal law.

Source: Washington Post

California Issues $3 Billion of IOUs

California will issue more than $3 billion in IOUs to pay its bills after local lawmakers failed to reach an agreement to bridge a $24 billion budget deficit in America’s most-populous state. Without budget changes to fill a recession-driven 20% drop in state revenue, California doesn’t have enough money to meet its debts and will issue IOUs beginning on July 1.

Source: Bloomberg

Iraqi Oil Auction Misses Mark

Iraq’s historic auction on June 30 of contracts to develop major oil fields didn’t go according to plan. So far, only BP and Chinese partner CNPC have struck a deal on Rumaila, Iraq’s most important field. The Iraqis certainly hoped for more. So why weren’t deals reached on other fields? The Iraqis are almost paranoid about being taken for a ride. They drove a hard bargain, forcing the companies into the role of service contractors — not the equity investors they prefer to be.

Source: BusinessWeek

IMF to Issue $150 Billion of Bonds

The International Monetary Fund is planning to issue as much as $150 billion of bonds for the first time in an attempt to develop new sources of funds. The bonds are part of a wider effort to seek new funding as the IMF helps countries from Iceland to Pakistan combat the global financial crisis.

Source: Bloomberg

U.S. Takes on UBS Over American Customers

U.S. officials are ramping up efforts to force Swiss financial giant UBS to release the names of thousands of American customers holding offshore accounts with the European bank. The Department of Justice, in a filing with a Miami district court on June 30, said UBS must be ordered “to comply in full” with an Internal Revenue Service summons asking for the identity of 52,000 undisclosed accounts.

Source: Financial Times

Citigroup Raises Credit Card Charges

Struggling U.S. bank Citigroup has increased interest rates on up to 15 million American credit card accounts months before limits on such practices take effect. The move is expected fuel anger over the treatment of U.S. consumers by government-funded banks.

Source: Financial Times

GE to Use Stem Cells in Research

Biotech company Geron will provide stem cells to General Electric’s healthcare division for use in tools testing for the toxic effects of drug treatments. The announcement takes GE further into stem-cell research. It’s also the first time a company of GE’s size has announced a business venture involving the controversial field of embryonic stem cells.

Source: Wall Street Journal

Crashes Focus Attention on Airbus Safety

The crash of an Airbus A310 off the African coast is focusing further scrutiny on the safety of Airbus planes. The accident comes just after another Airbus plan, an A330, crashed off the coast of Brazil on its way to Paris. Aviation safety experts, though, caution against drawing a link between the two crashes. The A310 is a far different aircraft from the A330.

Source: Washington Post