U.S. stocks scored modest gains as Wall Street closed up shop early for the July 4 holiday, with trading ending at 1:00 pm EDT. Some traders squared positions for Friday’s nonfarm payroll report that might give clues about the strength or weakness of the U.S. economy, according to Standard & Poor’s MarketScope.

On Tuesday, the Dow Jones industrial average was up 41.87 points, or 0.31%, at 13,583.48. The broader S&P 500 index was up 5.44 points, or 0.36%, at 1,524.87.

The tech-heavy Nasdaq Composite index rose 12.65 points, or 0.48%, to 2,644.95.

The market is closed Wednesday, July 4, for the U.S. Independence Day holiday.

Stocks got some support from a report on the U.S. factory sector released Tuesday. Factory orders fell 0.5% in May, but the number was much stronger than the 1.2% drop markets had expected, according to Standard & Poor’s. It also came after an upwardly revised 0.5% increase in April (from a 0.3% gain previously). Durable orders were revised to -2.4% from -2.8% originally, while nondefense capital goods orders excluding aircraft were down 2.1%. Factory shipments rose 1.0%, while inventories were up 0.3%, pushing the inventory-shipment ratio down to 1.23 from 1.24.

In other economic news Tuesday, the National Assn. of Realtors’ pending home sales index sank 3.5% to 97.7 in May vs 101.2 in April.

In energy markets Tuesday, August NYMEX crude futures, security concerns ahead of the July 4 holiday spurred late buying, according to Action Economics, with the price rallying to $71.35 highs, up 26 cents from Monday’s close.

Among stocks making headlines Tuesday, Pool Corp. («www.businessweek.com»; -7.3%) cut its 2007 EPS guidance, saying its daily sales rate did not increase as expected in June primarily due to greater-than-projected decrease in new pool construction and adverse weather in certain markets.

Kraft Foods («www.businessweek.com»; -2.45%) made a binding offer to acquire the global biscuit business of Groupe Danone («www.businessweek.com»; -1.2%) for €5.3 billion (US$7.2 billion) in cash.

SAP AG («www.businessweek.com»; -1.5%) acknowledged some inappropriate downloads from Oracle’s («www.businessweek.com»; +0.75%) Web site occurred at its TomorrowNow unit. SAP says the U.S. Dept. of Justice requested that the company and TomorrowNow provide certain documents.

Shares of Discover Financial («www.businessweek.com»; -3.0%), the credit-card services outfit being spun off by Morgan Stanley («www.businessweek.com»; +2.7%), declined in their first day of public trading Tuesday.

Continental Airlines («www.businessweek.com»; +11%) shares soared Tuesday after the company reported June revenue and traffic numbers that beat Wall Street expectations.

Thomas & Betts («www.businessweek.com»; +3.4%) agreed to purchase Danaher Corp.’s («www.businessweek.com»; +0.7%) power quality business for a cash purchase price of approximately $280 million, subject to post-closing adjustments.

Major European indexes were higher across the board Tuesday. In London, the FTSE 100 index rose 0.75% to 6,639.80. In Paris, the CAC 40 index climbed 0.71% to 6,069.84. Germany’s DAX index rose 1.16% to 8,050.68.

Asian markets were mostly higher. Japan’s Nikkei 225 index edged up 0.02% to 18,149.90. The Hang Seng index in Hong Kong jumped 1.74% to 22,151.14. The benchmark index in Shanghai rose 1.65%.

Treasury Market

Treasury investors took profits in light pre-holiday conditions on Tuesday, notes Action Economics. Gains in equities also contributed to the bearish tone for Treasuries.

The 10-year note was lower in price at 95-26/32 for a yield of 5.04%, while the 30-year bond was lower at 94-03/32 for a yield of 5.14%.

IMRAN Khan, the cricketer turned politician, yesterday warned that Pakistan was turning into a “banana republic” after the government arrested opposition leaders in a crackdown that pushed the country’s political crisis to new depths.

Politicians were rounded up during scores of raids by the security forces at the weekend ahead of planned demonstrations this week.

There were reports Mr Khan’s house, which is on a hilltop just outside the capital Islamabad, was targeted but he said he was unable to confirm this as he was away at the time.

Leaders of Nawaz Sharif’s PML-N party and some religious parties - all in a coalition of opposition parties - were taken away. By contrast, members of Benazir Bhutto’s Pakistan People’s Party, which is in negotiations with the president, Pervez Musharraf, about a power-sharing deal, were not touched.

Mr Khan told The Scotsman: “This is descending into a complete banana republic. Whatever obstacles come into Musharraf’s way, he is determined to remove them. And all for one reason: to stay in power.”

General Musharraf, a key ally of the United States in the region, is to stand for re-election as president early next month and the opposition had promised to mount increasingly large demonstrations, culminating on 29 September, when he files his nominations papers.

They have pledged to block the Election Commission to prevent the document from reaching there. The opposition has also mounted a Supreme Court challenge to Gen Musharraf’s eligibility to stand as president while head of the army, with a ruling due this week.

They say that if they fail to stop him in the courts, then they will undermine the legitimacy of his re-election by resigning from parliament.

Earlier this month, Mr Sharif, the former prime minister ousted by Gen Musharraf, was not allowed to enter the country when he tried to end seven years of exile and was deported immediately on landing at Islamabad airport.

Mr Khan said that Gen Musharraf had become emboldened by seeing off Mr Sharif and “he now thinks he can get away with anything”. He continued: “Musharraf is getting deeper into a hole. A commander-in-chief of an army trying to get elected as president of a country is a joke. This is just a veneer of democracy to please his western backers, an exercise in futility. This is just democracy through the barrel of a gun.”

Ministers in Gen Musharraf’s government have publicly suggested that, if he is not re-elected president, a state of emergency or martial law could be declared.

The chairman of PML-N party, Raja Zafar-ul-Haq, and the party’s firebrand leader, Javed Hashmi, were among those arrested, along with Hussain Ahmed, a central leader of the religious alliance, the MMA.

It was reported that police had orders to take 35 opposition leaders into custody. It was unclear how many were actually apprehended.

Tariq Azim, the deputy information minister, said: “The government has ordered the arrests of opposition leaders because they were threatening [to create] a law and order problem in the capital. Nobody will be allowed to take the law into their own hands.”

Police served a warrant on Mr Hashmi at an apartment complex for MPs on Saturday. The warrant said he would be jailed for 30 days to stop him from making inflammatory speeches at protests where “miscreants” could “cause disruption and acts of sabotage and terrorism”.

When Mr Sharif flew into Pakistan on 10 September, dissent was crushed. Opposition activists were rounded up and all roads to Islamabad airport were closed to ensure that no crowds turned out to greet him.

Shafqat Mahmood, a political analyst and former member of the Pakistan parliament, said: “This man [Gen Musharraf] would rather destroy Pakistan than not be elected. He will use any repression, any mangling of the constitution. Unfortunately, the UK and the Americans are fully behind him.”

British and American officials have worked behind the scenes to encourage an alliance between Gen Musharraf and Ms Bhutto. The US still sees the general as a bulwark against terrorism.

Gen Musharraf, who came to power in 1999 when he deposed Mr Sharif in a coup, has seen his popularity plummet this year after he tried unsuccessfully to sack Pakistan’s chief justice. He is also struggling to contain a violent insurgency from al-Qaeda and Taleban militants.

THE ONE-MAN BAND UNTAINTED BY CORRUPTION

ALTHOUGH Imran Khan was a massively popular cricketer in Pakistan, he has found the game of politics much more difficult.

People admire him but tend to vote for traditional political parties that offer tangible benefits, such as water wells or new roads, rather than lofty talk of renewing Pakistan.

Mildly Islamic and fiercely anti-American, Mr Khan, 56, is the only MP for the Tehreek-e-Insaf (Movement for Justice) political party he founded just over a decade ago.

However he is perhaps Pakistan’s only significant political figure untainted by allegations of corruption and this year he has finally gained some political traction.

Once a supporter of General Pervez Musharraf, Mr Khan has now emerged as one of his harshest and most articulate critics.

He has also won plaudits for the brave stance he has taken against the MQM, a Karachi-based political movement with a reputation for violence. Mr Khan is personally trying to prosecute the MQM’s leader, Altaf Hussain, exiled in London.

December 22, 2007 — Karl Rove, the former top adviser to President George W. Bush, has opted to have his memoir published by Threshold, a conservative imprint of Simon & Schuster that’s led by Republican strategist Mary Matalin.

Before yesterday’s announcement of a deal, industry pundits speculated that Rove would command a $3 million advance. However, no one was commenting on that yesterday, though several suggested that while he likely got a sizable sum, the final price tag never got that high.

The Associated Press, citing industry sources, said the advance was for “more than $1.5 million.”

Most observers were surprised when HarperCollins, the book publishing arm of News Corp. which also owns The Post, dropped out of the running early in the process.

Matalin was widely expected to have a big advantage in securing a deal because of her years working with President Bush and his father.

It is not expected to hit shelves until at least 2009.