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Key Earnings This Week: Aluminum, Discount Retailers and Restaurants

NEW YORK ( TheStreet) -- Third-quarter earnings season becomes a major focus this week, and on Tuesday and Wednesday six important companies report results.

One is Alcoa (AA - Get Report), a former Dow Jones Industrial Average component that traditionally kicked off earnings season.

But the five other companies I'm highlighting, in the retail-wholesale sector, are more important to watch this earnings season, because they will provide important information about consumer spending. Consumer confidence has slumped recently.

The basic materials sector is 5.1% undervalued and has an underweight rating with 64.9% of the 401 stocks in this sector rated sell or strong sell.

The retail-wholesale sector is 23.4% overvalued but has an overweight rating with 79.4% of the 354 stocks in the sector rated buy or strong buy.

Last week was a strange one for the major equity indices. The Dow Jones Industrial Average lost 185 points while the Nasdaq tacked on 26 points. The S&P 500 was down fractionally while the Dow transports and Russell 2000 were up fractionally. This week's value levels are 14,809 for the Dow Jones industrials, 1658.8 for the S&P 500, 3763 for the Nasdaq, 6522 for the Dow transports and 1053.22 for the Russell 2000.

The Nasdaq ended last week above my semiannual pivot at 3759 with the semiannual risky levels at 16,490 for the Dow industrials, 1743.5 for the S&P 500, 7104 for the Dow transports and 1089.42 for the Russell 2000. The Nasdaq set a new multiyear high at 3817.98 on Oct. 1 with the Russell 2000 setting a new all-time high at 1087.78. The all-time highs are 15,709.59 for the Dow industrials (set on Sept. 18), 1729.86 for the S&P 500 (set on Sept. 19) and 6754.81 for the Dow transports (set on Sept. 20).

New monthly and semiannual risky levels are 15,932 and 16,775, respectively, for the Dow industrials, 1746.4 and 1853.8 for the S&P 500, 3830 and 4024 for the Nasdaq, 6811 and 7205 for the Dow transports and 1092.46 and 1163.21 for the Russell 2000.

My annual value levels remain at 12,696 for the Dow industrials, 1348.3 for the S&P 500, 2806 for the Nasdaq, 5469 for the Dow Transports, and 809.54 for the Russell 2000.

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SYM TRADE IT LAST %CHG
AA $13.46 0.07%
COST $144.57 -1.73%
FAST $40.54 -1.17%
FDO $78.75 -0.79%
RT $7.21 -1.77%

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