The bears tried their best to keep the bulls underwater but the market continued to bounce off its lows into the second half of trading to finish in positive territory on Monday. Sentiment improved once the European markets closed and we face a few obstacles this week with some of their debt offerings but the market got off to a good start with Wall Street clearly focused on 4Q earnings.
The Dow added 33 points to close at 12,392 but reached a high of 12,409 which was all we were looking for after the open. The S&P 500 gained 3 points to end at 1,280 and kissed 1,282 on the cheek while the Nasdaq chipped-in with a 2 point pop to finish at 2,676.
We had some sweet pin action yesterday with a few of our trades and we have been giving you some nice option tips to start 2012 to get you on board. There are a lot of traders waiting for a pullback because we told you many of them took the last 2 weeks off in December and now they are trying to play catch up.
The Nasdaq jumped 43 points on the first day back to close at 2,648 and we said if Tech got over 2,650 things could get exciting. The close above 2,675 means the suit-and-ties and professional money managers have already missed 3% to the upside and could be chasing if the index breaks 2,700.
Alcoa (AA, $9.43, up $0.27) said some good things last night after the bell despite posting a loss for the quarter – its first in nearly a year – on lower aluminum prices. The company reported red ink of $191 million, or 18 cents a share, versus last year’s profit of $258 million, or 24 cents a share. Aluminum prices were down 12% in the fourth-quarter and nearly 30% from its April 2011 peak which hurt Alcoa to some degree.
The devil-in-the-details is that Alcoa took a one-time charge of nearly $160 million to shut-down some of its smelting operations which will help the bottom line over the long-haul. Otherwise, Alcoa would have checked in with a loss of 3 cents a share. Analysts had forecast a loss of 2 pennies a share.
The company did beat on revenue estimates, $6 billion versus a forecast for $5.7 billion, which was the best part. Alcoa also said global demand should grow by 7% this year which was ahead of the 6.5% that had been projected. In early action, shares are up 32 cents to $9.75.
Futures are showing a BIG open and look like this: Dow (+119), S&P (+14), Nasdaq (+24).
We will likely have another busy morning so stay on your toes for possible Profit Alerts or New Trades if our targets are hit or we see something else we like.
Subscribers, check the Members Area for the updates.