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Stocks higher as Alcoa hits Street forecasts

11:33 AM, Jan 9, 2013   |    comments
Traders work on the floor of the New York Stock Exchange earlier this year.(Photo: Stephen Chernin, AFP/Getty)
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NEW YORK -- Stock rose Wednesday after aluminum maker Alcoa got fourth-quarter earnings season off to a positive start by hitting Wall Street's targets.

All three major U.S. benchmarks closed lower Tuesday, with expectations for U.S. companies' profit lines mixed going into the latest reporting period that covers the final three months of 2012.

Still, for the fourth quarter Alcoa's income met analyst forecasts and the company also projected growing demand for aluminum in 2013. Alcoa earned $242 million, or 21 cents per share, compared to a loss of $191 million, or 18 cents per share, on a year-ago basis. Revenue hit $5.90 billion, which was more than the $5.58 billion predicted.

Alcoa is generally seen by investors as a bellwether for the health of the economy.

Elsewhere Wednesday, wireless network operator Clearwire jumped 8% after Dish network made an unsolicited offer to buy the company, which has already agreed to sell itself to Sprint.

Apollo Group plunged 10% after reporting a sharp decline in fall-term student sign-ups at the University of Phoenix.

European stocks were higher. Britain's FTSE 100 rose 0.89% while France's CAC-40 rose 0.27%.

Germany's DAX rose 0.36% after official figures showed industrial production rose less than expected in November. The 0.2% gain was not enough to offset a 2% fall the previous month and means German economic output overall likely fell in the fourth quarter.

"The figures provide further strong evidence that the eurozone's economic weakness has spread right into the core," said Jonathan Loynes, chief European economist at Capital Economics.

Investors will look forward to a monetary policy meeting by the European Central Bank on Thursday for clues on whether the weakening economic outlook is likely to trigger an interest rate cut in the coming months.

In Asia, Hong Kong's Hang Seng advanced 0.5% to 23,218.47 after a downturn in the prior session, with sentiment helped by gains in mainland Chinese shares.

"Stability in China is helping. We are taking a lot of cues from China-Asia," said Jackson Wong, vice president of Tanrich Securities in Hong Kong.

Japan's Nikkei 225 index opened lower on a strengthening yen but reversed course as the currency slipped against the dollar. The benchmark in Tokyo gained 0.7% to close at 10,578.57.

Australia's S&P/ASX 200 added 0.4% to 4,708.10. South Korea's Kopsi was 0.3% lower at 1,991.20. Benchmarks in Singapore, Taiwan, Thailand, and the Philippines rose. Indonesia and Malaysia fell. Mainland Chinese stocks were mixed.

In commodity markets, the benchmark crude oil contract for February delivery was up 30 cents to $93.45 per barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the euro fell 0.2% to $1.3057 while the dollar rose against the Japanese yen, to 87.46 yen from 87.19 yen.

USA Today

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