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Market Preview: Consider Yourself Warned

Still, B of A said it doesn't believe the earnings situation will be disastrous for stocks and noted that the trend in guidance has actually stabilized over the past few months and is "nowhere near crisis levels" despite the worries prompted by warnings from bellwethers such as FedEx (FDX) and Intel (INTC).

In the near-term though, it's all about Alcoa (AA), the first component of the Dow Jones Industrial Average to report each quarter. The aluminum producer is due to report its third-quarter results after the closing bell and the average estimate of analysts polled by Thomson Reuters is for a breakeven performance on a per-share basis on revenue of $5.57 billion in the September-ended period.

Alcoa shares are up a little less than 5% so far this year, but they are down nearly 10% over the past year with the 52-week high of $11.66 coming in late October 2011. While it's the first blue chip to report each quarter, it's debatable how much can be read into Alcoa's performance.

FactSet Research looked at the issue and found an earnings beat for Alcoa qualifies as a good omen for where the broad market heads from here but not much more.

"In terms of performance relative to estimates, about the same percentage of companies in the S&P 500 reported EPS above estimates in recent quarters whether Alcoa reported earnings above estimates or below estimates to start earnings season," the firm said on Friday. "In terms of price change over the last ten years, the S&P 500 has risen about 80% of the time during the next three months following an upside earnings surprise from Alcoa. Following a downside earnings surprise, however, the price of the S&P 500 has moved up almost as often as it has moved down over the following three months."

So perhaps it bodes well that Alcoa has a pretty low bar to hurdle as an in-line performance would be a small loss, its first since the fourth quarter of 2011. Alcoa has beat in the past three quarters but it missed in the three quarters before that, so making predictions is pretty dangerous. For what it's worth, the sell side is bearish ahead of the numbers with 13 of 20 analysts covering the stock at either hold (10), underperform (2) or sell (1).

Check out TheStreet's quote page for Alcoa for year-to-date share performance, analyst ratings, earnings estimates and much more.

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