Rallied on strong auto sales and factory orders

Stocks extended gains, as investors reacted to strong auto sales and an increase in U.S. factory orders for May. Though Tuesday's economic reports boosted markets, disappointing manufacturing data released Monday continued to temper optimism. Meanwhile, manufacturing activity in the euro area continued to decline in June, while the region's unemployment rose to a record high. The Chinese government's report of manufacturing activity declined slightly, but remained above the level indicating expansion. We do not expect expect substantial market movements this week.