Stocks headed for gains

NEW YORK (CNNMoney.com) -- U.S. stocks were poised to kick off August on a positive note Monday, as investors took an upbeat view on the economy.

At 7:25 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq 100 futures were higher. Futures measure current index values against their perceived future performance and offer an indication of how markets may open when trading begins.

U.S. stocks have been on a roll the past few weeks on positive earnings reports. The blue-chip Dow turned in its best July performance since October 2002.

But traders warn of volatility in August, which is typically a slow month for Wall Street.

"Stocks are expected to find strength early week," said Nick Kalivas, vice president of financial research at MF Global, in a research note. "Economic numbers should keep expectations for a recovery intact and profit growth forecasts buoyant."

A government report released last week showed the U.S. economy shrank at a smaller-than-expected 1% annual rate in the second quarter.

However, concerns about the weak job market could slow the momentum later in the week. The Labor Department will release its monthly jobs report Friday.

Economy: The Institute for Supply Management will release its index on nationwide manufacturing shortly after U.S. markets open.

The index is expected to have improved to 46.5 in July from 44.8 last month, according to a consensus of economists surveyed by Briefing.com. That would still be below the 50 level that indicates expansion in the manufacturing sector.

Autos: Reports on July auto and truck sales are due later in the day. Ford (F, Fortune 500) is expected to report a gain in monthly sales, a company executive said Sunday.

Ford said sales were boosted by the Cash for Clunkers incentive program, which aims to help the auto industry by taking inefficient cars off the road and spurring new sales.

But the Clunkers program could be suspended this week if the Senate doesn't approve $2 billion more in funding.

Earnings: Companies due to post quarterly financial results include Humana (HUM, Fortune 500) and Marathon Oil (MRO, Fortune 500).

World markets: Most Asian markets finished the session higher. The Hang Seng in Hong Kong added more than 1%, although the Nikkei in Japan finished the session a shade lower. Major European markets rallied in midday trading on a wave of upbeat bank earnings.

Oil and money. Light, sweet crude for September delivery was up $1.38 to $70.83 a barrel in pre-market, electronic trading.

The dollar fell against rival currencies. Against the euro, the dollar was down 0.3% to $1.4292. It was off 0.7% against the British pound. Japan's yen was up 0.3% versus the dollar.