The stock market's morning strength is fading lower into the afternoon. Overall global markets were up. More M&A news is fueling some investor confidence. The market digested another 3-year auction by the Treasury Department with a strong bid-to-cover ratio. Commodities have been stronger thanks to a weaker dollar. Oil is leading the energy sector higher and gold made headlines with an intraday move over $1,000 an ounce.

The Chinese markets continue to bounce. The Hong Kong Hang Seng gained 2.1% and marked its 4th gain in a row. The Chinese Shanghai index rallied 1.7% and posted its 6th gain in a row. The Japanese NIKKEI climbed 0.7% with traders closely watching potential resistance near the 10,400 level. Stocks are on a roll in Europe. Most of the major exchanges are up three days in a row. England had some mixed economic data this morning. The National Institute of Economic and Social Research said the U.K. economy grew 0.2% in the last three months. Yet the British Retail Consortium announced that retail sales declined as consumers continued to reign in their spending. England's factory output rose 0.9% in July, which was well above analysts' estimates.

Meanwhile there was some merger news overseas. France Telecom SA and Deutsche Telekom AG have decided to merge their British units into one company creating the country's biggest mobile phone service provider. England's candy maker Cadbury PLC has rejected Kraft's $16.7 billion acquisition offer from Monday. M&A news is typically seen as bullish since businesses don't normally make big deals unless they have confidence in their business and the economic environment. The English FTSE index gained 0.29% for the day. The German DAX rose 0.33%. The French CAC-40 ended up 0.22%.

The U.S. dollar has fallen to its lowest levels in almost a year and that's giving most of the commodities a boost. Gold spiked to $1,003 an ounce this morning. Silver is hitting new highs for the year. Copper prices are up more than 3%. Crude oil is making a big move with rally over $71 a barrel. Mining stocks and energy stocks are leading the market higher.

Currently the S&P 500 index is up just over five points at 1,022. The NASDAQ composite is up just almost nine points at 2,027. The Dow Industrials are up almost thirty points at 9470. The small cap Russell 2000 index is up just over two points near 573.

Let's take a quick look at charts for the major averages:

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

Scanning the OptionInvestor.com play list for movers I see that AAPL is up 1.1% and hitting new highs for the year near $173.00. The company holds its annual media event tomorrow. More conservative traders may want to take profits now. ATI is a big gainer with a 6.7% rally toward $32.00 a share. CF is hitting new highs with a 1.7% gain. Goldman Sachs (GS) broke out to new relative highs and hit our trigger to buy calls at $166.75. NEU is up 2% and trading above $85 again. Strength in oil has lifted OXY to a 3.5% gain. The USO is looking a lot stronger today with a 4.7% rally toward $37.