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Stocks Drop Before Earnings Season; Alcoa (AA) In Focus

 January 08, 2013 04:33 PM

(By Balachander) U.S. stocks ended in red ahead of the fourth-quarter earnings season that will start with bellwether Alcoa Inc. (AA) reporting its financial results.

The S&P 500 Index shed 0.32 percent to end at 1,457.15. The Dow Jones Industrial Average lost 0.41 percent to finish at 13,328.85. The Nasdaq Composite Index retreated 0.23 percent to close at 3,091.81.

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 Tuesday.


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In corporate news, Alcoa (NYSE: AA) reported better-than-expected quarterly revenue, and shares of the Dow component rose 1.86 percent higher in extended trading on Tuesday. Looking ahead for the full year 2013, Alcoa forecast global aluminum demand growth of 7 percent, up from 6 percent in 2012.

Boeing Co. (NYSE: BA) retreated 2.63 percent after BB&T Capital Markets downgraded shares to "hold" from "buy". A 787 Dreamliner aircraft caught on fire in Boston on Monday.

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Monsanto Co. (NYSE: MON) gained 2.67 percent after the company posted a jump in first-quarter earnings and sales with strong contribution from the corn seed and traits business and the company lifted its forecast for the full year.

Yum! Brands Inc. (NYSE: YUM) retreated 4.20 percent after the parent of the Taco Bell and KFC fast-food chains expects fourth-quarter same-store sales in China to fall 6 percent, a sharper drop than its previous forecast of a drop 4 percent.

Sears Holdings Corp. (NASDAQ: SHLD) fell 6.43 percent after retailer said Chief Executive Officer Louis D'Ambrosio will step down for family health matters. The company posted a drop of 1.8 percent in comparable store sales for the nine-week period ended December 29.

GameStop Corp. (NYSE: GME) tumbled 6.30 percent after the video game retailer said it expects fourth-quarter earnings to be at the low end of its forecast after reporting a decline in store traffic during the holiday selling period.

Signet Jewelers Ltd. (NYSE: SIG) jumped 9.05 percent after the Hamilton, Bermuda-based retail jeweler reported that same store sales during the holiday season rose 3.3 percent, with the US division up 4.7 percent. The company, which declared a quarterly cash dividend of $0.12 per share, also updated its fourth-quarter earnings outlook.

Lindsay Corp. (NYSE: LNN) surged 7.51 percent after the provider of water management and road infrastructure products reported an increase in quarterly earnings on higher revenue and margins. Earnings and revenue came in ahead of Wall Street expectations.

Acuity Brands Inc. (NYSE: AYI) lost 5.09 percent after the provider of lighting services posted weaker-than-expected first quarter earnings due to a lull in the nonresidential construction market demand as well as costs associated with closure of its production facility.

Fusion-IO Inc. (NYSE: FIO) plunged 9.62 percent. William Blair downgraded rating on the stock to "market perform" from "outperform".

Star Scientific Inc. (NASDAQ: STSI) surged 8.03 percent after the producer of dietary supplements reported "positive" initial results from a study that analyzes the impact of anatabine dietary supplementation on thyroid health.

Plexus Corp. (NASDAQ: PLXS) declined 5.78 percent after the company expects earnings and revenue for the first quarter below its guidance. The company said Networking/Communications sector revenue was substantially below its expectations.

Global Markets

European markets closed mixed, with Germany's DAX down 0.48 percent to close at 7,695.83. France's CAC40 inched 0.03 percent higher to finish at 3,705.88. The U.K.'s FTSE 100 shed 0.18 percent to end at 6,053.63.

Among Asian markets, China's Shanghai Stock Exchange Composite Index dropped 0.41 percent to close at 2,276.07. Japan's Nikkei 225 retreated 0.86 percent to finish at 10,508.06. Hong Kong's Hang Seng Index shed 0.94 percent to end at 23,111.19. India's BSE Sensex ended at 19,742.52, up 0.26 percent.

Commodity & Currency Scan

Crude oil futures rose 0.08 percent to $93.26 per barrel, while natural gas futures fell 1.19 percent to $3.23 per million metric British thermal units. Gold futures gained 0.72 percent to $1,658.20 per ounce and silver futures added 0.97 percent to $30.38 per ounce.

In the currency market, the euro fell 0.27 percent against the U.S. dollar to 1.3082. The British pound dropped 0.37 percent against the greenback to 1.6057, and the dollar retreated 0.82 percent against the Japanese yen to 87.0700.



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