Stocks up sharply, extending gains overseas

NEW YORK -- Fresh signs of healing in the manufacturing and banking industries are giving investors reason to try to extend a powerful July rally into a second month.

Stock opened up about 1% as gains in overseas markets feed the recent momentum on Wall Street that gave the market its best July in 20 years. World markets mostly rose as surveys in China and Europe showed manufacturing activity is improving. Investors are hoping that figures on the manufacturing industry in the U.S. released later Monday will reveal a similar trend.

Positive reports on the European banking sector added to the day's upbeat news.

Barclays said its first-half net profit increased 10% on stronger earnings from its investment banking division. Still, losses from bad loans rose as consumers in both the U.S. and Britain had trouble repaying debt.

In other signs of investors' growing confidence, safe-haven assets like Treasurys and the U.S. dollar are falling, while oil and other commodities prices are rising.

The major indicators begin the first trading day of August at their highest levels since the fall. The benchmark Standard & Poor's 500 index is just 13 points shy of the 1,000 level, a point it hasn't closed above since early November.

Stocks surged last month, reigniting a spring rally that had fizzled in June amid growing doubts that the economy was on solid footing. Stocks regained momentum as an increasing number of economic and corporate earnings reports suggested investors' bets had been well-founded.

Overseas, Hong Kong's Hang Seng index rose 1.1%, while Japan's Nikkei stock average slipped 0.04%. In afternoon trading, Britain's FTSE 100 rose 1.6%, Germany's DAX index rose 1.7%, and France's CAC-40 was up 1.5%.