While you were sleeping: Alcoa lifts stocks, outlook
Equities in the US and Europe rose after Alcoa's better-than-expected fourth-quarter revenue helped bolster optimism that US corporate results might beat expectations – albeit low ones – and that China will add lustre to the global economy.
The aluminum producer also predicted worldwide demand for aluminum will accelerate to 7 percent in 2013. Shares of Alcoa gained, last up 0.2 percent at $US9.12 after earlier rising as high as $US9.33.
Commodities also benefitted. Aluminum for delivery in three months rose 1.7 percent on the London Metal Exchange.
“Alcoa’s results were good, especially the revenue numbers and forward guidance, as was the comment that demand in China is coming back,” Manish Singh, head of investment at Crossbridge Capital in London, told Bloomberg News.
The current earnings quarter was shaping up like the previous one, with companies lowering expectations in recent weeks, James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania, told Reuters.
"So the big question and focus is on revenue, and Alcoa had better-than-expected revenue," he says.
In afternoon trading in New York, the Dow Jones Industrial Average rose 0.57 percent, while the Standard & Poor's 500 Index gained 0.40 percent, and the Nasdaq Composite Index advanced 0.49 percent.
Investors' appetite for the US Treasury's auction of $US21 billion sale of 10-year notes today was not as good as anticipated.
The notes drew a yield of 1.863 percent, compared with a forecast of 1.849 percent in a Bloomberg News survey of eight of the Federal Reserve’s primary dealers. The bid-to-cover ratio was 2.83, compared with an average of 3 for the previous 10 sales.
Yesterday's auction of $US32 billion of three-year securities drew a record high direct bid, according to Bloomberg.
Meanwhile, US President Barack Obama will on Thursday nominate White House chief of staff Jack Lew to be his next Treasury secretary, Reuters reported, citing a source familiar with the matter. If confirmed by the Senate, Mr Lew will replace Timothy Geithner.
And Morgan Stanley, the sixth-largest US bank by assets, plans to eliminate about 1600 jobs from its investment bank and support staff in coming weeks, Bloomberg reported, citing a person familiar with the proposal. The bank's shares were last down 0.7 percent.
Europe's Stoxx 600 Index finished the day with a 0.7 percent climb from the previous close. National benchmark stock indexes in London, Paris and Frankfurt also rose, closing with gains of 0.7 percent, 0.3 percent and 0.3 percent, respectively.
Policymakers at the European Central Bank are expected to hold the key interest rate at a record-low 0.75 percent tomorrow.