At 9 a.m. ET, Nasdaq and S&P futures were higher, with a comparison to fair value suggesting a positive open for Wall Street.

Stocks ended Tuesday's session higher after General Motors reported June auto sales that were not as bad had been expected.

The mood, however, could change with the release of a report on crude supplies; the ADP report on private sector employment showed continuing weakness.

Energy Oil prices pushed higher Wednesday amid fears of tightening supplies. U.S. crude for August delivery fell 24 cents to $140.73 a barrel in electronic trading.

Traders are awaiting a weekly inventory report from the U.S. Department of Energy.

Analysts surveyed by energy research firm Platts expect the report to show crude oil stocks fell 1.2 million barrels last week and gasoline stocks fell 500,000 barrels.

Distillate stocks, which include diesel fuel and heating oil, were forecast to have increased 2.4 million barrels in the week ended June 27.

The stockpile report comes a day after the International Energy Agency said in a report that oil demand is likely to grow, despite surging prices.

Economy Payroll services firm ADP reported the number of private sector jobs fell by 79,000, with the majority of losses stemming from the manufacturing sector.

Economists polled by Briefing.com had expected jobs to decline by 20,000 in June

The ADP report comes ahead of the government's monthly payrolls report, which is due out on Thursday.

Company news Merrill Lynch downgraded General Motors (GM, Fortune 500) to "underperform" from "buy" and lowered their price target for the automaker to $7 from $28 per share.

The downgrade comes one day after GM reported that sales in June fell 18%, which was better than the 25% decline that analysts had forecast.

Still, GM's performance was strong enough for it to maintain its title as the No. 1 automaker in terms of U.S. sales.

Health insurer UnitedHealth Group Inc. (UNH, Fortune 500) cut its profit outlook for the year on reduced commercial business and higher-than-expected Medicare-related costs.

The company now forecasts 2008 adjusted profit of $2.95 to $3.05 per share on revenue in the $81 billion range, down from prior estimates of $3.55 to $3.60 per share.

Microsoft (MSFT, Fortune 500) is still interested in Yahoo's (YHOO, Fortune 500) search business and has talked with a variety of media firms about teaming up for a deal that would eventually lead to a break up of Yahoo, The Wall Street Journal reported.

Blockbuster (BBI, Fortune 500) said late Tuesday that it is abandoning its bid to buy Circuit City Stores (CC, Fortune 500).

Starbucks (SBUX, Fortune 500) plans to close 600 stores, or about 8.5% of its total stores. The move is part of the coffee retailer's plan to turn around its business, which has been hit by the consumer slowdown.

Other markets In global trade, stocks in Japan ended the session lower for a 10th straight session. European shares rose in midday trading.

Bond prices rose early Wednesday, with the 10-year note adding 5/32 to yield 3.98%, unchanged from 3.98% on Tuesday.  

NEW YORK (CNNMoney.com) -- Stocks struggled higher Tuesday - with the Dow and Nasdaq pushing off bear market levels - after GM reported a June sales loss that was steep, but not as steep as had been expected.

A bounce in some of the recently battered financial shares also helped the market recover.

The Dow Jones industrial average (INDU) rose 0.3%.The broader Standard & Poor's 500 (SPX) index gained 0.4% and the tech-heavy Nasdaq composite (COMP) added 0.5%.

Stocks were volatile throughout the session, turning positive in the late morning after a report showed a surprise pick up in manufacturing activity and then sliding again in the early afternoon as the bank sector slumped.

Wall Street managed to recover again in the late afternoon after GM (GM, Fortune 500) reported that U.S. sales fell 18% in June versus a year ago. While that continued the string of big losses for the auto sector, the figure was shy of the 25% decline analysts had been looking for.

"GM was a surprise, with people expecting even more horrendous numbers," said John Wilson, chief technical strategist at Morgan Keegan.

Among other automakers, Ford Motor (F, Fortune 500) reported June U.S. sales slipped 28.1%, reflecting the impact of rocketing oil prices and a lack of investor confidence (Full story).

The Dow and the Nasdaq both briefly fell to levels that meet the technical definition of a bear market before bouncing back a little. A bear market is defined as a drop of at least 20% off the recent highs. The Nasdaq closed 24% off the October highs in March before staging a temporary recovery in May.

With oil prices above $140 a barrel and the financial sector outlook still bleak, it's hard to picture the market bouncing back much this summer, Wilson said

"We're looking at some terrible investor sentiment right now technically and we could see some sort of reversal, but I also don't see unbridled fear out there," he said. Typically, the fear factor would need to be worse in order for the market to be set up for a big bounce back, he said.

Thursday's market could be critical in determining whether stocks have put in a bottom this week or whether the "bear market" is going to take a firmer hold, said Donald Selkin, chief market strategist at National Securities.

Thursday's two key events are the latest interest rate decision from the European Central Bank and the June employment report. Current expectations are for the ECB to raise rates and for employers to have cut 60,000 jobs from their payrolls. Should that happen, stocks will most likely tumble, Selkin said.

But if the ECB were to hold steady, that would help the dollar, which would in turn bring down oil prices - good for equities. Should the employment report meet or slightly beat estimates, that would also be a positive.

"You can make a case for Thursday that it will another disaster to the downside," he said. "But it's also conceivable that we get bullish news and that today was the bottom."

Ahead of that, Wednesday brings the June reading private sector employment report from payroll services firm ADP. The ADP report is expected to show that employers cut 20,000 jobs from their payrolls in the month after adding 40,000 in the previous month.

Wednesday also brings the May factory orders report and the weekly crude oil inventories report.

Financials and other movers: Lehman Brothers (LEH, Fortune 500) shares rose as investors mulled talk that the bank may need to put itself up for sale and at a discount, much like Bear Stearns did.

Such concerns sent the stock plunging Monday, but Lehman bounced Tuesday after Morgan Stanley started coverage of the stock with an "outperform" rating.

American Express (AXP, Fortune 500) gained after UBS upgraded it to "neutral" from "sell" as part of a broader upgrade of the credit card sector, saying that the stock is now fairly valued relative to the difficult outlook.

CIT Group (CIT, Fortune 500) rallied on news it is selling its home lending business to Lone Star Funds for $1.5 billion and the assumption of $4.4 billion in debt. CIT is also selling its mobile home mortgage business for $300 million to Vanderbilt Mortgage and Finance. (Full story).

UBS (UBS) shares slipped after the company said it will reshuffle its board following big subprime mortgage losses.

On the downside, companies that derive a large portion of their profits from fuel suffered as oil prices rose. Airlines led the list of declining transportation stocks, dragging down the Dow Jones Transportation average by 1.8%.

Market breadth was negative. On the New York Stock Exchange, losers topped winners nine to seven on volume of 1.64 billion shares. On the Nasdaq, decliners beat advancers four to three on volume of 2.67 billion shares.

Oil and gas prices jump: U.S. light crude for August delivery rose 97 cents to settle at $140.97 a barrel on the New York Mercantile Exchange, an all-time closing high. The front-month contract moved close to the all-time trading record of $143.67 per barrel hit Monday before trimming gains. (Full story).

The national average price for a gallon of regular unleaded gas rose to a record $4.087 from a record $4.086 the previous day, according to AAA. (Full story).

Other markets: In currency trading, the dollar fell versus the euro and the yen.

In the bond market, Treasury prices fell, raising the yield on the benchmark 10-year note to 4.00% from 3.97% late Monday. Bond prices and yields move in opposite directions.

COMEX gold for August delivery rose $16.20 to settle at $944.50 an ounce.

Manufacturing index improves: The Institute for Supply Management said its manufacturing index rose to 50.2 in June beating forecasts for a slide to 48.6, according to a consensus of economists surveyed by Briefing.com. A reading above 50 implies expansion, while one below implies a contraction in the sector.

However, the report also showed a big jump in the prices manufacturers pay for raw materials, reflecting the run up in oil prices and other inflationary pressures.

A separate report showed a decline in May construction spending, although it was not as big a decline as had been expected.

The benign news helped temper some worries about the economy, but any relief was short lived amid the ongoing threat to growth from higher fuel prices and the credit market fallout.

Worst June since the 1930s: Wall Street struggled Monday at the end of the worst June for the Dow and S&P 500 since the Great Depression, ending a tough first half of the year on a dour note. In the first half, the Dow lost 14.4%, the S&P 500 fell 12.8% and the Nasdaq fell 13.5%.

The Dow's plunge of 10.2% in June was the worst monthly performance since September 2002 when it fell 12.4%, and the worst June since 1930, when it sank 17.7%. The S&P 500's 8.6% decline was the worst month since September 2002, when it fell 11% and the worst June since 1930, when it fell 16.5%.

The Nasdaq fell 9.1% in June - the worst monthly performance since this past January - when it lost 9.9%, and the worst June since 2002, when it shed 9.4%. 

At 8:12 a.m. ET, Nasdaq and S&P futures were lower, with a comparison to fair value suggesting heavy losses at the open.

Monday, which was the last trading day in June, brought an end to a brutal month and dour quarter.

In the second quarter overall, the Dow Jones industrial average lost 7.4% and the broader S&P 500 index lost 3.2%. The Nasdaq managed to add 0.6%.

The Dow is close to a level at least 20% off its highs in October - which is the technical definition of a bear market.

Meanwhile, a selloff in Asian and European stocks also weighed on futures.

Japan's Nikkei 225 ended 0.13% lower. The DAX index of German stocks fell nearly 2% and the U.K's FTSE was down 2.6%.

Energy Oil prices rose after hitting a record high in the previous session.

Light, sweet crude for August delivery was up $2.45 to $142.45 a barrel in pre-market electronic trading.

The front-month crude contract touched an all-time high of $143.67 a barrel on Monday.

Economy A key manufacturing index and report on construction spending are due to be released.

The Institute of Supply Management's survey of purchasing managers is expected to decline to a reading of 48.6 in June from 49.6 in May, according to economists surveyed by Briefing.com. The report is due out at 10 a.m. ET.

The government's report on construction spending will also be released at 10 a.m. ET. That report is expected to show the rate of spending on residential and nonresidential construction declined 0.4% in May after a 0.6% slide in April.

Autos June auto sales are also on tap and could move shares of General Motors (GM, Fortune 500) and Ford (F, Fortune 500), both of which are expected to post big monthly declines. GM shares touched a near 54-year low Monday.

The June report could be the worst month for auto sales since 1992. The annualized rate of auto sales in May was $14.3 million. Sales have tumbled amid record gas prices.

The national average price for a gallon of regular gas reached a new all-time high of $4.087, according to AAA on Tuesday. Gas prices are now 38% higher than year-ago levels.

Financials Credit market fears could send banks and financial stocks falling again. Lehman (LEH, Fortune 500) tumbled 11% Monday amid renewed speculation that the bank's ongoing credit woes could force it to sell all or part of itself sometime soon.

Swiss bank UBS AG (UBS) has restructured its board to counter criticism from shareholders over the "clubby nature of its ranks," the Wall Street Journal reported.

Separately, the Journal reported that the Justice Department is seeking to force UBS to turn over the names of wealthy U.S. clients who allegedly used the giant Swiss bank to avoid taxes.

Deals Brewer InBev SA is pushing ahead with its pursuit of Anheuser-Busch despite the U.S. brewer's rejection of its unsolicited $46 billion takeover bid.

InBev (INBVF) has made a plea to Anheuser (BUD, Fortune 500) shareholders to challenge the company's decision to turn down the buyout.

Last week, Anheuser announced a plan to boost its stock price and its profits in an effort to maintain its independence or extract a higher bid from the Belgian-Brazilian brewer.

Other markets In global trade, stocks in Japan ended the session slightly lower. European stocks closed sharply lower.

The euro rose to $1.5785 early Tuesday from $1.5775 late Monday.

Gold prices rose $2.20 to $930.50 an ounce in electronic pre-market trading.  

The Dow Jones industrial average (INDU) added a couple of points. The broader Standard & Poor's 500 (SPX) index gained 0.1% and the tech-heavy Nasdaq composite (COMP) lost 1%.

Stocks tumbled last week on a combination of record-high oil prices, a weak dollar and more bad news in the financial sector.

Considering the breadth of last week's selloff, Monday's mixed trade was far better than what could have been expected, said Greg Church, president at Church Capital.

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. And the Nasdaq hit the technical definition of a bear market in March, falling 24% off its October highs, but has partially recovered since then.

Monday marks the end of a rough first half of the year on Wall Street. It is also the last day of a volatile month, and quarter.

"It's been a terrible June, something like the worst since the Great Depression," said Church.

The S&P 500 lost 8.6% in June, the worst monthly performance since September 2002 when it lost 11%, and the worst June performance since 1930, when it slumped 16.5%.

During the month, 91% of the industries in the S&P 500 declined, with almost of them falling by 10% or more, according to Sam Stovall, Standard & Poor's chief investment strategist.

The Dow lost 10.2% month-to-date, the worst monthly performance since September 2002 when it tumbled 12.4%, and the worst June performance since 1930, when it sank 17.7%.

The Nasdaq fell 9.1% - the worst monthly performance since this past January - when it lost 9.9%, and the worst June since 2002, when it shed 9.4%.

Monday also marks the last day of the second quarter and the first half.

In the second quarter overall, the Dow lost 7.4%, the S&P 500 lost 3.2% and the Nasdaq managed to gain 0.6%.

Year-to-date, the Dow is down 14.4%, the S&P 500 is down 12.8% and the Nasdaq is off 13.5%.

Church said that July doesn't look like it will be any better, with questions about fuel prices and the financial sector set to continue to rattle investors.

Oil volatile after 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 settle at $140 a barrel, down 21 cents. (Full story).

Gas hits new high. The national average price for a gallon of regular unleaded gas rose to a record $4.086 from $4.079 the previous day, according to AAA. (Full story).

Company news. Blue chip stocks found some buyers on the last day of the quarter, while the tech-fueled Nasdaq slipped.

Oil stocks Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), BP (BP) and Sunoco (SUN, Fortune 500) were among the big gainers. Beyond commodities, other gainers included biotech and select telecom stocks.

But an advance was limited by continued weakness in auto and financial stocks and some selling in technology.

General Motors (GM, Fortune 500) and Ford Motor (F, Fortune 500) both lost over 3% as investors continued to dump the stocks amid rising fuel prices. Both companies report June sales Tuesday and are expected to report big declines.

Citigroup (C, Fortune 500), Lehman Brothers (LEH, Fortune 500) and JP Morgan Chase (JPM, Fortune 500) were among the big bank stocks falling.

Brokerage Robert W. Baird cut earnings and price targets on a number of banks, including Comerica (CMA) and Wachovia (WB, Fortune 500), according to the Associated Press.

H&R Block (HRB) reported improved quarterly sales and earnings that topped estimates, thanks to a strong tax season and the sale of its mortgage unit. Shares gained 3.7%.

Anheuser-Busch (BUD, Fortune 500) 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.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers by three to two on volume of 1.61 billion shares. On the Nasdaq, decliners beat advancers three to two on volume of 2.11 billion shares.

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.

Other markets: In currency trading, the dollar was little changed versus the euro and fell versus the yen.

In the bond market, Treasury prices were barely higher, with the yield on the benchmark 10-year note at 3.96%. Bond prices and yields move in opposite directions.

COMEX gold for August delivery fell $3 to settle at $928.30 an ounce.