U.S. Indexes Rebound; Alcoa Swings to Loss

Arthi Gupta
10 Jan, 2012
New York City

The U.S. indexes gained on the earnings optimism and Alcoa kicked off earnings season with a loss. Banks were in focus ahead of earnings next week. Chinese trade surplus increased to $16.5 billion in December.

[R]9:45 AM New York – The U.S. indexes gained on the earnings optimism and Alcoa kicked off earnings season with a loss. Banks were in focus ahead of earnings next week. Chinese trade surplus increased to $16.5 billion in December.[/R]

U.S. and global indexes advanced after European leaders said they made progress toward implementing tougher budget rules across the euro zone.

The benchmark indexes in Europe soared 2.4% led by miners as political leaders make one more attempt to finalize terms of lending for Greece. At least in the morning trading, stocks were higher on the optimism after the aluminium maker Alcoa Inc met earnings expectations.

German Chancellor Angela Merkel and French President Nicolas Sarkozy met in Berlin yesterday indicating that they made progress on an agreement to implement new budget rules for the euro-zone.

However, they warned Greece would not receive the next tranche of the bailout money unless it moves forward with promised structural changes and deeper spending cuts to avoid a disorderly default.

The German Chancellor is scheduled to have talks with the International Monetary Fund Managing Director Christine Lagarde in Berlin today.

Chinese trade data was mixed, with surplus widening in December, as both export and import growth eased amid slowing demand from Europe, data from the customs agency showed.

Exports grew 13.4% from a year ago in December, slower than the 13.8% growth recorded in November. Imports rose 11.8% from last year in December.

The trade surplus advanced to $16.52 billion in December, from the $14.5 billion in November.

The customs agency said the trade surplus in 2011 totaled $155.14 billion, down from $183 billion in 2010.

Foreign direct investment into India in November surged 56% to $2.53 billion, after two months of declining trend, the PTI reported.

Air Products to Divest Homecare Business

Air Products & Chemicals Inc., the industrial gas maker agreed to sell its homecare business in continental Europe to Germany-based Linde AG for €590 million, or $751 million.

The deal covers the sale of Air Products'' patient-based oxygen-therapy, sleep-therapy and infusion-therapy services in Belgium, Germany, France, Portugal and Spain.

Earnings Review

Alcoa Inc. ((AA)), the aluminum producer said fourth quarter sales rose 6% to $5.99 billion from $5.65 billion in the same quarter last year. Net loss for the quarter was $191 million or 18 cents per diluted share compared to net income of $258 million or 24 cents per share for the year-ago quarter.

Corus Entertainment Inc., the Canadian media and entertainment company reported first quarter revenues rose 7% to C$236.89 million from C$222.16 million a year earlier. Net income in the quarter climbed 6% to C$50.55 million or C$0.61 per diluted share compared to net income of C$47.72 million or C$0.58 per share last year.

DSW Inc. ((DSW)), the footwear retailer raised its annual earnings per share guidance to a range of $2.96 to $2.99 for fiscal year 2011 from a range of $2.90 to $2.95, excluding any impact from the RVI merger and related items.

Tiffany & Co. ((TIF)), the luxury goods retailer reported worldwide net sales in the two-month holiday period rose 7% to $952 million from the year ago period.