Alcoa booked a fourth-quarter loss in line with expectations Monday, and investors did not seem to be in a mood to nitpick Tuesday morning as the aluminum producer and the broader market aimed for a fast start.
Shares of Alcoa were 1.2% higher trading, after recording better than expected revenue of just under $6 billion and a loss of 3 cents per share, excluding restructuring charges, that was in line with estimates. The aluminum giant’s forecast for 7% demand signals slower industry-wide growth than in the past two years, but was still in line with its long-term forecast.
The Dow Jones industrial average, which counts Alcoa among its 30 components, gained 110 points to 12,503 in the opening minutes of trading, while the S&P 500 jumped 15 points to 1,296 and the Nasdaq rallied 34 points to 2,711.
Alcoa provides the informal kickoff to fourth-quarter earnings season, which gets a batch of major reports from the financial sector starting this week with JPMorgan Chase. The reports come as the Federal Reserve reviews the capital plans major U.S. banks were required to submit by Monday. The latest version of the central bank’s stress tests requires banks to shock their portfolios to judge resilience to scenarios including a repeat of the credit crunch of 2008 and negative outcomes to the European sovereign debt crisis.
Shares of JPMorgan were 2.8% higher Tuesday ahead of Friday’s earnings, while rivals Bank of America, Citigroup and Wells Fargo, due to report next week, were also in positive territory.
WebMD Health was one of the stocks not participating in the early gains, plunging 29.7% after announcing the abrupt resignation of Chief Executive Wayne Gattinella. The company also terminated its board’s exploration of a potential sale and warned that its fourth-quarter results will come in toward the lower end of its guidance. Even worse, WebMD said revenue could fall 2-8% in 2012, with the sharpest pain coming in the first half of the year. CFO and COO Anthony Vuolo will serve as interim CEO while the company conducts an executive search.
Tiffany was also left out of Tuesday’s rally, with shares falling 10.4% after the upscale retailer lowered its full-year earnings view on weaker than anticipated holiday sales. After a strong performance for three quarters, the company said jewelry spending was more cautious in the U.S. and Europe during the holiday season. Earnings for the fiscal year ending Jan. 31 are now expected to come in at $3.60-$3.65 per share, down from $3.70-$3.80.
(forbest.com)
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