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.
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. Follow @atwtse Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.>.
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