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Stocks Drop Before Earnings; Alcoa (AA) In Focus

 January 07, 2013 04:29 PM

(By Balachander) U.S. stocks closed on a negative note as investors await quarterly earnings from bellwether Alcoa Inc. (AA).

The S&P 500 Index fell 0.31 percent to end at 1,461.87. The Dow Jones Industrial Average lost 0.38 percent to finish at 13,384.29. The Nasdaq Composite Index dropped 0.09 percent to close at 3,098.81.

Aluminum producer Alcoa will report its financial results on Tuesday, thereby officially kick-starting the fourth-quarter earnings season. (Read preview)

[Related -Level Watching and Swing Trade Planning for Amazon (AMZN)]

New York-based Alcoa's results are eyed closely as it usually is the first Dow component to report earnings, and investors often watch AA's results to gauge how earnings may fare for other companies. Moreover, the results always impact the broader market, including index futures and ETFs.

There were no major U.S. economic data released on Monday.


In corporate news, Alcoa (NYSE: AA) closed 1.73 percent lower ahead of its quarterly report. The company is expected to earn 6 cents a share on revenue of $5.61 billion for the fourth quarter, according to analysts polled by Thomson Reuters. In the year-ago quarter, the company reported a loss of 3 cents a share on revenue of $5.99 billion.

[Related -Cree, Inc. (CREE) Q2 Earnings Preview: What To Expect?]

Amazon.com Inc. (NASDAQ: AMZN) rose 3.61 percent after Morgan Stanley upgraded rating on the shares to "overweight" from "equal weight".

Walt Disney Co. (NYSE: DIS) lost 2.34 percent. Reuters reported that the company commenced an internal cost-cutting review several weeks ago that may include layoffs at its studio and other units.

Boeing Co. (NYSE: BA) fell 2.01 percent amid reports that a 787 Dreamliner aircraft caught on fire in Boston.

Yahoo! Inc. (NASDAQ: YHOO) retreated 2.42 percent after Bernstein downgraded rating on the shares to "market perform" from "outperform".

Illumina Inc. (NASDAQ: ILMN) tumbled 7.09 percent amid reports that Swiss pharmaceutical group Roche does not intend to make a bid for the gene-sequencing company. 

Nationstar Mortgage Holdings Inc. (NYSE: NSM) shot up 16.85 percent after the company agreed to acquire roughly $215 billion in residential mortgage servicing rights from Bank of America Corp. (NYSE: BAC) for around $1.3 billion.

Cree Inc. (NASDAQ: CREE) slumped 7.33 percent after Canaccord lowered rating on shares of the semiconductor materials to "hold" from "buy".

VIVUS Inc. (NASDAQ: VVUS) surged 8.15 percent after the bio-pharmaceutical company disclosed a jump in prescriptions shipped for weight-loss drug Qsymia.

ITT Educational Services Inc. (NYSE: ESI) plunged 19.28 percent after for-profit education company agreed to pay a one-time payment of $46 million to Sallie Mae Inc.  to settle a lawsuit related to a risk sharing loan program agreement between the companies.

Global Markets

European markets closed lower, with Germany's DAX down 0.56 percent to close at 7,732.66. France's CAC40 fell 0.68 percent to finish at 3,704.64. The U.K.'s FTSE 100 shed 0.41 percent to end at 6,064.58.

Among Asian markets, China's Shanghai Stock Exchange Composite Index added 0.37 percent to close at 2,285.36. Japan's Nikkei 225 retreated 0.83 percent to finish at 10,599.01. Hong Kong's Hang Seng Index slid 0.01 percent to end at 23,329.75. India's BSE Sensex ended at 19,691.42, down 0.47 percent.

Commodity & Currency Scan

Crude oil futures inched up 0.16 percent to $93.24 per barrel, while natural gas futures fell 0.43 percent to $3.27 per million metric British thermal units. Gold futures edged 0.08 percent lower to $1,647.50 per ounce while silver futures added 0.65 percent to $30.14 per ounce.

In the currency market, the euro added 0.34 percent against the U.S. dollar to 1.3114. The British pound gained 0.27 percent against the greenback to 1.6113, while the dollar retreated 0.42 percent against the Japanese yen to 87.7800.



1/7/2013 10:55:49 PM
by Brett @ wstreetstocks
The Amazon upgrade was probably the biggest news of the day. I pretty bearish on Amazon's future despite the upgrade today.
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