Europe Moves Higher on the Back of Alcoa

NEW YORK (TheStreet) -- Trading in Europe proved very strong Thursday after the prior session saw the market come to a virtual standstill.

The European markets were up about 1%, with the European blue-chip companies, as tracked by the DJ STOXX 50 index, up by 1.5%, the highest of the last few weeks of trading. On the other hand, blue chip companies from the emerging European markets were up only 0.6%, even though on the longer term emerging markets have a tendency to outperform the developed markets.

The gains in Europe follow Alcoa's(AA Quote) better-than-expected third-quarter earnings. Alcoa was the first major U.S. company to report the third-quarter results and this had a strong influence in the market. The profits were not top-line income increases; positive cash flow came from job cuts and squeezing of operating costs.

S&P Futures: S&P 500 futures tested the 1065 area during the overnight session, but until now the futures market failed to find the necessary momentum to move any higher. To the upside, the next target lies in the 1075 area, the same place where the market formed a swing point high on Sept. 23.

Sector Moves: The basic resource sector posted one of the strongest gains of the last few months during the European session, gaining almost 4%. This was best seen in the U.K. FTSE, where commodity stocks have an important weight. The financial sector shares were up in most of Europe, with a 1.7% gain, but U.K. banks declined as Lloyds(LYG Quote) announced plans to raise 15 billion pounds by issuing new shares. Consequently, Lloyds and Royal Bank of Scotland (RBS Quote) were the worst performers in the U.K. index.

Strong performances came from the European automobiles and parts sector, with a 2.25% gain in Thursday trade. The ultra-defensive health care sector continued to be the worst gainer in Europe, gaining only 0.6%.