9:00am (EST)
The market struggled with direction yesterday, but the bulls still found a little mustard to put on their hot dog following last week’s showoff performance. It seemed Wall Street was a little cautious heading into the start of earnings season which Alcoa (AA, $10.87, down $0.07) “unofficially” kicked-off last night. (More on that story in a minute.)
Despite the uneasiness, the Dow managed to finish with a gain of 18 points, or 0.2%, to settle at 10,216. The index traded to a high of 10,220, and the low was 10,146 before settling slightly above our 10,200 “pivot point”.
The S&P 500 added a point, or 0.1%, to finish at 1,078. The index traded to a low of 1,070, and the high was 1,080. There is still a possibility the index could test 1,100, and the bears are hoping to get back down to the 1,040-1,050 range.
The Nasdaq added 2 points, or 0.1%, and closed at 2,198 after reaching a high of 2,213. The bulls seem to be having trouble with the 2,200 level, and the 200-day moving average of 2,240 should act as another layer of resistance going forward.
Turning to earnings, Alcoa beat expectations after the company announced a profit of $136 million, or $0.13 a share, versus a loss of $454 million, or $0.47 a share, in the year ago period. Analysts were looking for 12 cents on average.
Revenue rose to $5.2 billion from $4.2 billion for the quarter which was also a little ahead of expectations. Although aluminum prices were down during the quarter, Alcoa beat lowered expectations for the first time in 3 quarters. Analysts had projected earnings of 24 cents a share at the start of the quarter and kept lowering estimates based on the falling prices of aluminum so this news really isn’t all that impressive.
The company did, however, say it expects global aluminum consumption to jump 10%-12% for the year, but we think there are better places to invest your money than taking a chance on Alcoa.
Elsewhere, CSX (CSX, $52.46, up $0.70) blew past the Street’s forecast after reporting earnings of $414 million or $1.07 per share, versus $305 million or $0.77 a share, in the year ago quarter. The pencil pushers were looking for earnings of $0.98 a share.
Revenue for the Railroad company jumped over 20% to $2.7 billion while analysts were looking for revenue of $2.6 billion.
All-in-all, it was a decent start for the quarter, and futures are showing a nice pop at the open. As we head to press, the Dow futures are surging 70 points to 10,251 while the S&P 500 futures are higher by 10 to 1,086. The Nasdaq 100 futures are up 17 points to 1,837.
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