While you were sleeping Stocks up before Alcoa results

Tuesday 9th July 2013

Equities on Wall Street and in Europe gained as investors awaited the unofficial start of the US second-quarter earnings season with the results of Alcoa due after the close of the American markets.

The aluminum producer is expected to report earnings of 6 US cents per share on revenue of US$5.83 billion, according to Reuters. Alcoa shares were last up 1 percent.

"With analysts having downgraded their expectations in recent weeks, we should be seeing fewer negative surprises in the US earnings season," John Plassard, vice president at Mirabaud Securities in Geneva, said, according to Bloomberg News. "So sentiment is quite good before Alcoa reports numbers."

In late afternoon trading in New York, the Dow Jones Industrial Average gained 0.64 percent and the Standard & Poor's 500 Index advanced 0.49 percent. The Nasdaq Composite Index edged 0.02 percent lower.

Shares of Dell rose, last 3 percent higher at US$13.42, as Michael Dell unexpectedly gained crucial support from Institutional Shareholder Services for his and Silver Lake Management's buyout plan of the company. The competing offer is from Carl Icahn. Shareholders vote on July 18.

"The ISS seal of approval makes the Silver Lake/Michael Dell deal more likely to receive shareholder approval," Brian White, analyst at Topeka Capital Markets told Reuters, adding that ISS views Icahn's bid "as coming with too much uncertainty."

Meanwhile, US Treasuries drew investors as the recent climb in yields had made them attractive. The benchmark 10-year yield was last down nine basis points to 2.65 percent. Earlier in the session the yield had risen to touch 2.75 percent, the highest since August 2011, according to Bloomberg.

The White House said it expected US gross domestic product to rise 2.0 percent this year and 3.1 percent again next year, below the 2.3 percent and 3.2 percent growth projected in President Barack Obama's budget of April 10, according to Reuters. In a budget and economic update, it also lowered its forecast for unemployment.

In Europe, the benchmark Stoxx 600 Index ended the day with a 1.4 percent gain from the previous close. The UK's FTSE 100 index increased 1.2 percent, France's CAC 40 rose 1.9 percent while Germany's DAX gained 2.1 percent. For the most part European markets were catching up with strong gains on Wall Street on Friday.

Euro-zone finance ministers today approved an agreement that will provide Greece with much-needed access to additional rescue loans.

BusinessDesk.co.nz

Comments from our readers

No comments yet