This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stocks Climb on Positive Earnings Kickoff

NEW YORK ( TheStreet) -- Major U.S. stock markets booked a fourth consecutive session of gains as investors were emboldened by an encouraging start to the new earning season led by Alcoa's ( AA) report Monday evening and the company's reassurances on China demand.

The S&P 500 rose 0.72% to 1,652.32. The Dow Jones Industrial Average gained 0.5% to 15,300.34. The Nasdaq advanced 0.56% to 3,509.26.

"I think [the rise] in the short run is Newtonian physics: an object at rest can stay at rest, an object in motion tends to stay in motion," said Mark Travis, president of Intrepid Capital Funds. "There's just a feeling that things are improving and we're the best house in a bad neighborhood maybe."

After the market close Monday, Alcoa reported second-quarter losses following restructuring costs, yet still managed to beat analysts' expectations. Alcoa reported a loss of 11 cents a share, losing $119 million for the quarter. Excluding restructuring and legal fees, the company earned 7 cents a share on $5.85 billion in revenue. Analysts polled by Thomson Reuters were looking for earnings of 6 cents a share on $5.83 billion in sales.

The company also eased some worries about the economy slowing in China, on Monday maintaining its estimate that global aluminum demand would persist at a 7% pace this year, spearheaded by demand in China where Alcoa reiterated its growth improvement outlook of 11%.

Shares pulled back 0.13% to $7.91, reversing earlier gains.

Tuesday is a relatively light day on earnings and economic data. On Friday, JPMorgan ( JPM) and Wells Fargo ( WFC) will lead the kickoff of bank earnings.

Paul Pagnato, the Washington D.C.-based partner and managing director of HighTower's Pagnato-Karp Group which oversees more than $2 billion in client assets, said the market's been up for four days in a row thanks to hopes that Alcoa's positive report will be the first of many this earnings season.

"I do feel optimistic and that's because all the economic indicators in our country seem very, very good," Pagnato said during an interview at TheStreet's headquarters in New York. "So getting back to the housing market, the employment market, the purchases of cars ... If you look at the broad-based economic indicators, things look positive. And when the majority of economic indicators are starting to point in a positive direction, you should have good earnings."

Pagnato added that the chances of earnings beats also have increased this earnings season because during last quarter's outlook announcements, CEOs and CFOs of S&P 500 corporations did a "good job" of revising estimates downward, helping to lower the bar for this season.

Netflix was one of the top percentage gainers Tuesday on the S&P 500 after the company announced that it had extended an agreement with CBS (CBS) to continue streaming the television giant's shows. The announcement may not have come as a shock as CBS CEO Leslie Moonves had said in December that he would likely exercise an option to extend a two-year Feb. 2011 deal. Shares jumped 6.1% to $247.38.

Tesla Motors ( TSLA) rose 1.5% to $123.45 after the late Monday announcement that the Palo Alto, Calif.-based company will be joining the NASDAQ-100 Index and the NASDAQ-100 Equal Weighted Index next week underscored the coming of age of the electric car and the Model S, and most importantly, Tesla itself.

Barnes & Noble ( BKS) popped 5.4% to $18.61 after the company announced that William Lynch has resigned as CEO and director of the company effective immediately. The announcement comes as the company continues to lag in the fast-expanding tablet and e-reader markets.

According to Thomson Reuters data, earnings of S&P 500 companies are expected to increase 2.9% for the second quarter.

In other corporate news, Intuitive Surgical ( ISRG) was the largest percentage loser after the medical devices maker announced that its second-quarter revenue will likely miss Wall Street targets. Furthermore, no less than three brokerages have now lowered their ratings and price targets on Intuitive Surgical. Shares fell 16.2% to $419.30.

August gold futures gained $11 to settle at $1,245.90 an ounce Tuesday, while August crude oil futures closed up 39 cents to $103.53 a barrel.

Meanwhile investors Tuesday were also awaiting minutes from the Federal Open Market Committee's June 18 to 19 meeting scheduled for Wednesday to gather more information on the central bank's stimulus tapering timeline.

Written by Andrea Tse and Joe Deaux in New York

>To contact the writer of this article, click here: Andrea Tse.>.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AA $11.07 -0.72%
ATI $30.12 -0.26%
BKS $25.74 -0.85%
ISRG $485.84 0.28%
NFLX $655.45 -0.23%

Markets

DOW 17,757.91 +138.40 0.79%
S&P 500 2,077.42 +14.31 0.69%
NASDAQ 5,013.1230 +26.2560 0.53%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs