Alcoa kicks off earning season in a positive way

Stocks rally as investor sentiments get a boost from the first earning report of the season



US stocks climbed up for the sixth time in seven sessions on Tuesday, 13 July 2010. Positive earning report from Alcoa after yesterday's close once again cheered investors who became now all the more optimistic about the pace of the global economic recovery. Portugal's debt downgrade did not deter investors who stepped once again into buying. Positive economic report from international Energy Agency regarding crude's demand also boosted investor sentiments.

For the day, that ended on Tuesday, 13 July 2010, Dow ended higher by 146.75 points at 10,363.02. Nasdaq ended higher by 43.67 points at 2,242.03. S&P 500 ended higher by 16.59 points at 1,095.34. All ten economic sectors ended higher led by consumer discretionary, industrial, materials and financial sectors.

Twenty-nine out of thirty Dow components ended higher at Wall Street today led by Caterpillar and Intel. Pfizer was the sole Dow loser after California's highest court reinstated a lawsuit in which retail pharmacies accused it and other drug makers of conspiring to keep drug prices artificially high.

After Monday's close, aluminum giant Alcoa reported that second quarter revenue grew by 22% surpassing expectations. The company also said that metal prices are expected to remain high in coming months. In addition, another Dow components Chevron reportedly said that it expects sequential earning growth in its latest quarter.

Among economic reports scheduled for the day, the Commerce Department reported that the nation's trade deficit widened to its largest level in eighteen months due to climbing imports which surpassed rising exports.

On Tuesday, the IEA said that global oil demand will climb up by 1.6% next year thereby putting total demand of oil at 87.8 million barrels a day.

On Tuesday, Moodys Investor Services downgraded Portugal's sovereign debt ratings by two notches from A1 to Aa2. This once again rekindled fears in the eurozone front and upset the recent revival in investor confidence over the global economic recovery but the same failed to derail the indices from their session highs.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies fell by 0.7%.

Crude oil prices ended substantially higher on Tuesday, 13 July 2010 at Nymex. Prices rose as market cheered Alcoa's earning report following yesterday's close and also as IEA projected a rise in demand next year. Weak dollar also boosted prices. On Tuesday, crude-oil futures for light sweet crude for August delivery closed at $77.15/barrel (higher by $2.2 or 2.9%). Last week, prices gained 5.5%.

Bullion metal prices ended substantially higher on Tuesday, 13 July 2010 at Comex. Prices rose after traders showed back interest in buying bullion metals following their recent drop in prices. Physical demand for bullion also provided required support as traders returned back to them following Portugal's debt downgrade. The weak dollar also aided in higher bullion metal prices.

On Tuesday, gold for August delivery ended at $1,213.5 an ounce, higher by $14.8 (1.2%) an ounce on the New York Mercantile Exchange. On Tuesday, September Comex silver futures ended higher by 34 cents (1.9%) at $18.26 an ounce. This was highest closing for silver in two weeks.

Barring Infosys and WNS, all Indian ADRs ended mostly higher on Tuesday. Tata Motors and ICICI Bank were the main gainers soaring 4% and 2.2% respectively.

Market will focus on Intel's earning report, which is scheduled to report after today's close. Other than that, economic reports expected for tomorrow are the retail sales data and export import price data.