Oil Still Weighing on Stocks

Solid earnings from Alcoa can't lift the futures.
Author:
Publish date:

Stocks were lower early Tuesday as continuing pressure from energy markets squelched any optimism created by

Alcoa's

(AA) - Get Report

first-quarter earnings beat.

Index futures recently showed the

S&P 500

trading 3 points below fair value, while the Nasdaq 100 was set for a 4-point decline. The 10-year Treasury bond was up 2/32 in price to yield 4.95%, while the dollar fell against the yen and euro.

Crude powered higher, building on its 12% gain since the start of January. On Monday, oil closed near an eight-month high as concerns about U.S. military intentions in Iran spread jitters in futures markets. May crude recently rose 63 cents to $69.37 a barrel in electronic Nymex trading.

Strength in another commodity, aluminum, helped Alcoa report a doubling in first-quarter earnings to $608 million, or 69 cents a share, as sales rose 16% to $7.2 billion. Analysts were forecasting earnings of 51 cents a share on sales of $7.2 billion. The

Dow

component's shares rose 7% to about $35 in after-hours trading.

Real estate has also been hot and underpinned strong orders at

D.R. Horton

(DHI) - Get Report

. The homebuilder said it booked 15,771 orders worth $4.4 billion in the three months to March 31, up 10% and 7%, respectively, from a year ago.

Tuesday's earnings docket includes

Genentech

(DNA)

, the biotech titan whose shares have quadrupled since early 2003. A key number will be sales of cancer blockbuster Avastin, which analysts currently peg at about $389 million.

Stocks ended mixed Monday as high oil and interest rates kept buyers mostly sidelined. Since their most recent trough last fall, however, stocks remain firmly in bull-market mode, with the Dow Jones Industrial Average up 6.7% since Halloween, the S&P 500 up 7.5% and the

Nasdaq Composite

up 10%.

Overseas stocks eased, with London's FTSE 100 recently down 0.1% to 6061 and Germany's Xetra DAX losing 0.8% to 5956. In Asia, Japan's Nikkei fell 0.2% overnight to 17,418, while Hong Kong's Hang Seng lost 0.3% to 16476.

To view David Peltier's video take on today's premarket action, click here

.

No major economic reports are scheduled for Tuesday. On Wednesday, investors will see data on the U.S. trade deficit for February. Economists forecast a slight narrowing to $67.6 billion. On Thursday the Commerce Department is expected to say that retail sales rebounded by 0.5% in March after falling 1.4% in February.

Among companies,

Bausch & Lomb

(BOL)

stopped shipping varieties of its ReNu contact lens solution in the U.S. after the FDA reported a rising number of fungal infections in patients using the product. Shares dove after hours.

Micron

(MU) - Get Report

said second-quarter earnings rose to $193.2 million, or 27 cents a share, thanks to an asset-sale gain. Revenue fell 6% from a year ago to $1.23 billion, about $110 million short of estimates.

General Motors

(GM) - Get Report

confirmed a deal to sell its stake in Isuzu to a group of trading companies for $300 million. The transaction is the latest in a series of transactions GM has pursued to raise cash by selling noncore assets.