Alcoa helps lift market after 2 days of declines


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Originally Posted Online: July 09, 2014, 1:46 pm
Last Updated: July 09, 2014, 6:17 pm
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NEW YORK (AP) — Corporate earnings season got off to a positive start Wednesday, helping lift the stock market after two days of declines.

The market opened higher and remained modestly higher throughout the day. Stocks climbed further after the Federal Reserve released minutes from its latest policy meeting in June.

The biggest gainer in the Standard & Poor's 500 index was Alcoa. The aluminum giant's earnings, which investors consider to be the official start of the quarterly corporate earnings season, came in well above Wall Street's expectations. Alcoa earned $138 million, or 18 cents a share, compared with analysts' estimates of 12 cents a share, according to FactSet. Alcoa rose 84 cents, or 6 percent, to $15.69.

As companies begin reporting their second-quarter results, investors will be looking for signs that the strengthening U.S. economy has translated into higher sales and profits. Analysts expect earnings increased 6.6 percent in the three months through June compared with the previous year, according to S&P Capital IQ, a research firm.

Investors argue that with stocks trading near all-time highs, it's now up to companies to show whether or not these record high prices can be justified.

"Stocks are not cheap, and we need to be assured that these companies' growth is going to continue," said Quincy Krosby, market strategist with Prudential Financial.

The next big name to report will be the major U.S. bank Wells Fargo, which reports Friday. The bank is one of the country's biggest mortgage lenders, and investors will be looking for Wells' outlook on the housing market.

"I'm looking for a good, but not a great, earnings season," said Michael Fredericks, portfolio manager of the Multi-Asset Income Fund at BlackRock. "We really need to see the guidance from companies, if management teams are as upbeat as the market."

The Dow Jones industrial average rose 78.99 points, or 0.5 percent, to 16,985.61. The S&P 500 index rose 9.12 points, or 0.5 percent, to 1,972.83 and the Nasdaq composite rose 27.57 points, or 0.6 percent, to 4,419.03.

The market kept up its positive momentum following the latest report from the Federal Reserve.

Policymakers at the Fed have come up with a rough timetable for when the central bank's bond-buying program will wind down, according to minutes from the bank's most recent meeting. They generally agreed that the program will end in October, if the economy continues to improve at this pace.

The Fed is currently buying $35 billion a month in bonds and has been cutting back by $10 billion a month at each meeting since December. The program is designed to keep interest rates low to stimulate borrowing and economic activity.

The bond market turned higher after the Fed's announcement. The yield on the 10-year U.S. Treasury note fell to 2.55 percent from 2.56 percent Tuesday, a reversal from earlier in the day, when yields were 2.58 percent. Bond yields fall when prices rise.

In individual company news:

— American Airlines rose $1.73, or 4.3 percent, to $41.98. The world's largest airline raised its sales forecast for the second quarter, typically the busiest time of year. The news helped lift other airline stocks, including Delta, which rose 1.5 percent. Airline stocks had taken a beating earlier this week.

— The Container Store, which went public less than a year ago, plunged $2.27, or 8 percent, to $24.80. CEO William Tindell warned that the company was in a "retail funk" and that the sluggish sales of the winter seemed to be lingering into the spring and summer. The Container Store went public at $18 a share in November and its shares doubled in price on the day of its debut to $36.20.














 



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  Today is Saturday, Aug. 2, the 214th day of 2014. There are 151 days left in the year.

1864 -- 150 years ago: Because of the National Fast, no paper will be issued from this office tomorrow.
1889 -- 125 years ago: Attracting considerable attention is a sunflower stalk 15 feet high and still growing in the yard of Dr. C. Speidel on 23rd Street in Rock Island.
1914 -- 100 years ago: The municipal bathing beach proposition came up again at the city commission's meeting and a proposition passed, provided that a locker room be constructed at the foot of 7th Street for the accommodation of the bathers.
1939 -- 75 years ago: Plans for erecting a $14,000 warehouse to replace the frame structure at the rear of the Augustana Book Concern were announced.
1964 -- 50 years ago: Hours for tours of the new Deere & Co. Administrative Center on John Deere Road will be changed, effective Monday.
1989 -- 25 years ago: Tuesday night at the Great Mississippi Valley Fair in Davenport the Nitty Gritty Dirt Band gave its fans more than they possibly could have expected. The band took the stage at 9:07 p.m. and didn't leave until 10:40.









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