Alcoa results disappoint; Europe bailout vote fails

Alcoa also sees economic weakness in Europe and Asia. Slovakia rejects expanding Europe's bailout fund. The Dow slips, but technology shares help the S&P 500 and Nasdaq end higher. Apple tops $400. Gold moves lower, but crude is higher.

By Charley Blaine Oct 11, 2011 1:03PM

Charley BlaineUpdated: 6:47 p.m. ET

Stocks finished essentially flat today as investors waited for third-quarter earnings from Alcoa (AA) and a parliamentary vote in Slovakia on whether to expand the eurozone's bailout fund.

The wait didn't result in good news. Alcoa missed Street estimates on its earnings. The company warned that business in Europe was hurting and stresses in the global economy were trimming demand. Shares moved lower after hours. Because of Alcoa, futures trading suggests a modestly lower open on Wednesday.


Meanwhile, Slovakia rejected the bailout plan, and the government of Prime Minister Iveta Radicova appears to have fallen on a no-confidence vote. A vote on the plan may be taken up later this week.  

While the market was basically flat, technology shares had a strong day. Apple (AAPL) closed above $400 for the first time since Sept. 29. Energy, airline, mining and medical information stocks led the market.  Gold (-GC) moved lower. Interest rates were a touch higher.

The Dow Jones industrials ($INDU) closed down 17 points to 11,416. The Standard & Poor's 500 Index ($INX) , which smashed through several resistance levels on Monday, added 1 point to 1,196. The Nasdaq Composite Index ($COMPX) was up 17 points to 2,583, and the Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was up 16 points to 2,295.

Article continues below.

Apple, up 3% to $400.29, contributed 11 points to the Nasdaq-100's gain. The stock hasn't closed above $400 since Sept. 26 and is up 12.9% since bottoming on Oct. 4 and nearly 6% since Steve Jobs' passing the next day.

Research In Motion (RIMM) shares were up 5.1% to $24.41. There was excitement after activist shareholder Jaguar Financial issued a statement claiming additional support in its campaign against the company's current management team. At the same time, the company was experiencing network outages in Europe and Latin America.

RIM shares are down 58% this year as the company has struggled to compete against Apple's iPhone and devices built on Google's (GOOG) Android platform.

Futures trading suggests stocks may open modestly lower on Wednesday -- on the assumption of a successful Slovakian vote this week.

The market will be tested with how overseas markets judge the Slovakian situation. In addition, Federal Reserve will release minutes of the Sept. 20-21 Federal Open Market Committee meeting after a one-day delay. The release comes at 2 p.m. ET.

Pepsico (PEP) is the day's big earnings report.

Alcoa falls as results disappoint
Alcoa shares were off 4.4% to $9.85 after hours after third-quarter results missed Wall Street estimates. The shares had finished up 2.1% to $10.30.

Alcoa earned 15 cents a share excluding one-time charges on revenue of $6.4 billion. That was better than the Street estimate of $6.24 billion. Analysts had been expecting 22 cents a share. A year ago, the company earned 6 cents before one-time charges on $5.3 billion in revenue.

The stock is off some 42% since peaking in early April. That reflects a slowing global economy, including the after-effects of the Japanese earthquake and tsunami. Watch for its outlook on Europe and China as well as North America.

Aluminum for delivery in three months peaked at about $2,800 a ton in London in May and now is at about $2,200, a decline of 21%.

Energy prices -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$85.81

$85.41

8.35%

-6.10%
(per barrel)











Heating oil (-HO)

$2.9041

$2.9039

4.49%

14.17%
(per gallon)











Natural gas (-NG)

$3.6160

$3.5410

-1.36%

-17.91%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7476

$2.6953

8.25%

12.00%
(per gallon)











Brent crude 

$110.73

$108.95

7.76%

16.87%
(per barrel)











Retail gasoline

$3.3960

$3.3950

-1.42%

10.55%
(per gallon; AAA)












Watching the vote in Slovakia
Financial markets spent the day watching what looked like an interminable parliamentary debate in Slovakia over extending the eurozone bailout fund. 

Slovakia was the 17th and last eurozone country that must approve the extension for it to take effect. Without an extension, efforts to stanch the financial bleeding in Greece may stall, and financial markets will be roiled.

The rejection of the fund would risk bringing about a new economic crisis, Finance Minister Ivan Miklos warned, adding, "This time even a worse one than the 2008 crisis after the collapse of Lehman Brothers."

The debate, however, was also over the future of conservative Prime Minister Iveta Radicova's government. The loss of the confidence vote may force new elections. But the vote on the extension may get taken up later this week.

The urgency of Europe's financial crisis has forced serious talk on how to recapitalize its largest banks to withstand the shocks of the debt crisis. Jean-Claude Trichet, the president of the European Central Bank, warned that the eurozone crisis has "reached a systemic dimension" and said governments must swiftly push through fiscal reforms and coordinate a recapitalization of banks.

Alcoa, Caterpillar lead the Dow
Fourteen of the 30 Dow stocks were higher, led by Alcoa, Caterpillar (CAT), up 1.9% to $80.66, and Bank of America (BAC), up 1.4% to $6.37. AT&T (T) was the laggard, down 1.4% to $28.77.

Fifty-three Nasdaq-100 stocks were higher, with Ctrix Systems (CTXS) the leader, up 5.5% to $61.19. Infosys (INFY) was  the laggard, down 2.2% to $52.66.

Meanwhile, 239 S&P 500 stocks were higher, led by Sprint Nextel (S), up 7.2% to $2.38, and Ctrix. First Solar (FSLR), down 6.5% to $55.91, and futures-market operator CME Group (CME), down 3.4% to $257, were the laggards.

Dollar's rise pushes gold, copper lower
Gold settled down $9.80 to $1,661 an ounce as the dollar was higher against the euro and other currencies.

Silver (-SI) settled up 1.8 cents to $31.998 an ounce. Copper (-HG) was off 8.6 cents to $3.282 a pound.

Crude oil (-CL) was up 40 cents to $85.81 a barrel. Brent crude was up $1.37 to $110.32 a barrel.

The 10-year Treasury yield rose to 2.16% from Monday's 2.076%.

Short hits from the markets -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0100%

0.010%

-50.00%

-91.67%
5-year Treasury note 

1.135%

1.081%

17.62%

-43.70%
10-year Treasury note

2.160%

2.076%

12.27%

-34.64%
30-year Treasury bond

3.111%

3.024%

6.50%

-28.68%
Currencies











U.S. Dollar Index

77.908

77.811

-1.48%

-1.74%
British pound

1.5620

1.5664

0.27%

0.09%
(in U.S. $)











U.S. $ in pounds

£0.640

£0.638

-0.26%

-0.09%
Euro in dollars

$1.36

$1.36

1.82%

1.55%
(in U.S. $)











U.S. $ in euros

€ 0.736

€ 0.733

-1.79%

-1.53%
U.S. $ in yen 

76.86

76.68

-0.34%

-5.53%
U.S. $ in Chinese

6.40

6.34

0.28%

-3.31%
yuan











Canada dollar

$0.970

$0.974

1.54%

-3.36%
(in U.S. $)











U.S. dollar 

$1.032

$1.026

-1.44%

3.49%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,661.00

$1,670.80

2.39%

16.86%
(per troy ounce)











Copper (-HG)

$3.282

$3.368

4.12%

-26.20%
(per pound)











Silver (-SI)

$31.9980

$31.9800

6.37%

3.43%
(per troy ounce)











Wheat (-ZW)

$6.6075

$6.1150

8.45%

-16.81%
(per bushel)











Corn (-ZC)

$6.4500

$6.05

8.86%

3.61%
(per bushel)











Cotton 

$1.0347

1.0334

3.27%

-28.55%
(per pound)











Coffee

$2.2675

2.296

-0.94%

-5.72%
(per pound)











Crude oil (-CL)

$85.81

$85.41

8.35%

-6.10%
(per barrel)










 

71Comments
Oct 11, 2011 3:49PM
avatar
It still seems as though imposing tariffs on Chinese products would level the playing field between Chinese made and American made products. As for the "poor" which is, most of us? Just remove OIL from the commodities/speculat​ion market, so that the price is not driven up for greed. Then us "poor people" will have enough money to buy American products, and fill up our gas tanks and heat our homes.
Oct 11, 2011 7:39PM
avatar

Another day of more BS on Wall Street. Oil is on its way to $86 a barrel. These morons are hell bent on pushing prices over $100 a barrel again for their own gain. #2 heating oil is already $3.56 cents a gallon in my area and heating season has not even started yet. What the heck, if a few old and poor people freeze this winter that will be okay as long as the Moron Speculators and Traders make a few more million to stash in their bank accounts. There are absolutely no fundamentals right now to support high oil prices except Trader Greed. They should be a little more concerned with what is happening on Main Street instead of Europe. These people need to be regulated by our Government. This economy does not stand a chance of coming back with these pigs at the helm. They are a big part of the reason for the mess that we are currently in.

Oct 11, 2011 5:31PM
avatar

Here is something to think about a little bit:

Price of oil YTD chg - -6.10%

Price of retail gasoline YTD chg - +10.65%

Anybody else think there is something wrong with that picture?  And they say that oil refiners aren't making a little extra money in their pockets?  BS!!

Oct 11, 2011 2:09PM
avatar

VIENNA (AP) - OPEC slashed its estimate for oil demand this year and said it expected sales to stagnate next year, in a forecast Tuesday blaming global economic uncertainty for cutting into the world's appetite for crude.

Updating last month's forecast, the 12-nation Organization of the Petroleum Exporting Countries said that it expected demand to be up by nearly 1 million barrels a day this year over last. That projected increase will be 180,000 barrels a day less than its previous estimate, it said.



So why is crude up at all? It would be so refreshing if these people would just admit to their greed and market manipulation.

Oct 11, 2011 4:05PM
avatar
Anyway, buying better quality products always will work out for the best. Just take a look at Chinese made anything and you'll probably be looking in the trash because its all trash anyway. Buying better made things that last is always cheaper.Thumbs up
avatar
China warning US throwing the world into a Great Depression like the 1930's

Beijing warns on US currency law
Oct 11th, 2011 10:33 by News

11-Oct (Financial Times) — China has warned that the US could plunge the global economy into a 1930s-like depression if it passes a bill that aims to punish Beijing for holding down the value of its currency.

With the Senate set to vote on Tuesday on legislation that would impose tariffs on imports from countries that manipulate their exchange rates, China has said that the consequences of such a move could be dire, leading to a trade war.

Oct 11, 2011 4:54PM
avatar
Wow!!  All that "hope" that drove the market up yesterday sure disappeared today.  I agree, oil should not be a traded, speculative commodiity unless full price is paid for the contract without any credit being extended to the oil traders.  Make them put some skin in the game.  Then watch how fast the price of oil and gas falls.
Oct 11, 2011 2:28PM
avatar
So why is crude up at all? It would be so refreshing if these people would just admit to their greed and market manipulation.
They did; Thje OPEC'ers said it only costs about $10 to produce a barrel of oil. The other $60 is to maintain lifestyle...
Oct 11, 2011 3:24PM
avatar
Gingersnap,  if we tax China on imports than you can definitely expect operations to be moved elsewhere.  Mexico is looking more and more attractive especially with rising shipping costs and a NAFTA agreement that does not tax importations from Mexico.  There will always be a cheaper alternative than the US for manufacturing, unfortunately.     
avatar
side note just like it's ok for Bernanke to magically print $12 trillion and give it to the Wall Street bankers. It seems it's ok for the President to have a secret panel that decides whom to assassinate but not other people. It's this one standard for the common man and another standard for the ruling elite that has gotten us in all this trouble. It's ok for Wall Street to place a very risky bet and lose the farm and then beg us to bail them out and then turn around and fee us to death like the debit card fee lots of banks are going to be charging. But for one of us to write a hot check like Wall street did and they throw us in jail and don't bail us out. 

Perhaps Occupy Wall Street has a valid point. 

Two men allegedly working for "factions of the Iranian government" have been charged with plotting to assassinate the Saudi ambassador to the U.S. and to attack the Saudi and Israeli embassies, Attorney General Eric Holder said Tuesday.


The criminal complaint, unsealed Tuesday in federal court in New York City, identified the two as Manssor Arbabsiar and Gholam Shakuri.

Oct 11, 2011 6:20PM
avatar
This is the end, the end of our elaborate plan my friend......Jim Morrison 1967. That will be the anthem of the Banksters. Europe is about to fall into disarray, taking the banks, U.S., and the world economy with it.
Oct 11, 2011 2:21PM
avatar
It's 2:20.  SELL SELL SELL !!!!! watch it happen in real time. We got a COMMUNIST country telling or government what to do? Wish some of our founding fathers could see this. They would throw there wigs for sure...
Oct 11, 2011 2:58PM
avatar

The job's bill vote in the Senate is worth keeping an eye on, today.  If something isn't done quickly about the employment picture in America .. people are not going to have to worry about the vote in Slovakia OR the grumblings of China currency exchange rate.

 

 

avatar
Rumor has it Russia is telling Slovakia to vote no on expanding the euro zone's bailout fund. 

Guess it's pay back for when the IMF loaned Russia money and told them how to run their economy. Putin put a stop to that by nationalizing the oil jumping the price from $10 a barrel to $40 a barrel and using that money to pay them back 
Oct 11, 2011 8:07PM
avatar
Stocks will crash tomorrow after Bernanke admits in the FOMC minutes that he doesn't see anyway in hell that Goldman can get out of losing their shirts in all the Greek bonds they hold and CDS's they have in the European market. This ought to make Lehman look like a cake walk. Gonna be hard to fanagle another bail-out for Goldman with the approaching election coming and people marching in the streets. They hid the last one you know.
Oct 11, 2011 4:32PM
avatar

so, the goal of banking is to reach the lowest common denominator of ethics in the world? 

 

Re:  Banks would be barred from trading for their own profit instead of their clients under a rule federal regulators proposed Tuesday.  …… The Federal Reserve has also approved a draft what has been called the Volcker Rule. It was named after former Fed Chairman Paul Volcker……..….The banking industry said Tuesday the rule is too complex to work and will put U.S. financial firms at a competitive disadvantage to those in other countries.
Oct 11, 2011 1:47PM
avatar
Of course stock will waiver based on the press coverage. What I want to know is how the press will destroy the euro if one of the countries defaults. If it is real or not it is all in how the press wants to sell news.
Oct 11, 2011 3:14PM
avatar

Now, if we imposed tariffs on Chinese imports, wouldn't the prices of Chinese products at Walmartz go up? And then, wouldn't Made in the USA products be competitive? Wouldn't that mean hiring new workers in America to meet the new demand?

 

I guess I'm just full of questions today.

Oct 11, 2011 5:21PM
avatar
Don't worry folks, the banks, who have collectively engaged in blatant federal tax evasion since 2008, will report record profits and record bonuses again and save the stock market for another month.

Is it just me, or did anyone else notice the convenient timing and distraction of the Justice Depts. announcement of the foiled assassination attempt right after being called out for their complete incompetence in the handling of prosecuting bank executives, the SEC, and other banking agencies for fraud, racketeering and other RICO violations?

Oct 11, 2011 6:34PM
avatar
MAIN STREET NEEDS TO TAKE OUT WALL STREET  NOW !!!!!!!
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